1984 Legislative Session: 1st Session, 33rd Parliament
Hansard
The following electronic version is for informational purposes only.
The printed version remains the official version.
(Hansard)
MONDAY, JANUARY 30, 1984
Afternoon Sitting
[ Page 2943 ]
CONTENTS
Routine Proceedings
Oral Questions.
Public funding of intervenors in Kemano hearings. Mr. Howard –– 2943
Status of Women council funding. Ms. Brown –– 2944
BCILA concerns over tree-farm licences. Mr. Skelly –– 2944
David Thompson University Centre. Mr. Nicolson –– 2944
Cascade Creek. Mr. Rose –– 2945
Tabling Documents –– 2946
Committee of Supply: Ministry of Finance estimates. (Hon. Mr. Curtis)
On vote 34: minister's office –– 2946
Hon. Mr. Curtis
Mr. Stupich
Mr. Lea
Mr. Howard
Mr. Passarell
Mr. Mitchell
Mr. Lockstead
Appendix –– 2966
MONDAY, JANUARY 30, 1984
The House met at 2:04 p.m.
Prayers.
MR. SPEAKER: I wish to advise all hon. members that Mr. John Holtby, formerly first Clerk-Assistant to the Ontario Legislature, with the cooperation of the Parliamentary Centre in Ottawa has been made available to this House and will be with us for the forthcoming session.
HON. MR. SMITH: Mr. Speaker, I have the pleasurable duty today of welcoming to the House and to the precinct a large number of representatives of the Vancouver Status of Women, who are meeting today with both caucuses. Our caucus met with them and had a very full and fruitful discussion. I ask the House to make them welcome.
MR. SKELLY: Mr. Speaker, I would like the members to welcome a number of people from the forest industry in the central interior of British Columbia. Among them are Ross Martin, chairperson of the B.C. Independent Logging Association, and Howard Lloyd, a former member of this Legislature and chairperson for forestry and legislation of the BCILA. They are accompanied by Frank Drougel, general manager of the Central Interior Logging Association. They met with our caucus today, Mr. Speaker, to discuss forestry issues in the interior.
MS. BROWN: Mr. Speaker, I would like to add my voice to the Attorney-General's in welcoming the women from the Vancouver Status of Women council, as well as volunteers and supporters from the North Shore Women's Centre, the YWCA, Simon Fraser University Women's Centre, East Side Family Place, West Side Family Place, Hastings Family Drop-in, White Rock Women's Place, Battered Women's Support Services, Women Against Violence Against Women, the Vancouver Rape Crisis Centre, the Women's Health Collective, the Women's Research Centre, and the Service, Office and Retail Workers' Union.
MR. PELTON: Mr. Speaker, if my glasses serve me well this afternoon, I believe I see a number of people from my riding in the back of your gallery. Certainly I recognize Mr. David Vernon, who is a solicitor in Maple Ridge. He is also the chairman of our local chamber of commerce. I would like the House to welcome him and those other people from Dewdney who are here this afternoon.
MS. SANFORD: I would like to introduce to the Legislature Peter Johnston from Lasqueti Island, who is a member of the parents' committee concerned about education in School District 69.
MR. NICOLSON: Visiting us from the heritage city of Nelson are Howbart and Rosmund Sorensen of Nelson, and I wish the House to make them welcome.
MR. CAMPBELL: I'm pleased to welcome Ed and Ruth Arnt, and Lance and Ann Arnt, from Okanagan North. I would ask you to make them welcome here today.
MR. HOWARD: At this time, Mr. Speaker, I rise under standing order 54 to ask the unanimous consent of the House to move a motion relating to the October 5 suspension of the Leader of the Opposition.
MR. SPEAKER: Hon. members, while this particular period in our proceedings has been ruled on as one on which a motion of that kind cannot be introduced, because of the uniqueness of the situation and the lack of precedent I nonetheless, and without forming a precedent, will put the question to the House. Shall leave be granted?
Leave not granted.
MR. SPEAKER: I heard several noes, hon. members.
MR. HOWARD: I noticed there were several noes. Mr. Speaker will notice, if it could be entered in the Journals, that they all came from that side of the House, led by the Premier.
Oral Questions
PUBLIC FUNDING OF
INTERVENORS IN KEMANO HEARINGS
MR. HOWARD: Mr. Speaker, I would like to direct a question to the Minister of Energy, Mines and Petroleum Resources. Has he or the government decided to reconsider the government's policy decision to refuse funding for public interest groups who may be interested in appearing as interveners in the Kemano completion project hearings, in the interest of providing a balance between the general public, the interveners and Alcan?
HON. MR. ROGERS: No, Mr. Speaker.
MR. HOWARD: May I ask a supplementary question, Mr. Speaker? I wonder if the minister could tell the House whether he has made any approach to the Utilities Commission or to Alcan regarding the possibility of Alcan funding interveners at the hearings as part of its application costs.
HON. MR. ROGERS: I have had several discussions with Alcan and have advised them that they can fund anyone they choose.
MR. HOWARD: Awfully generous of you.
In view of the minister's policy of no assistance for interveners in the Kemano hearings, can the minister explain why the Ministry of Energy, Mines and Petroleum Resources has been mailing Alcan publicity material in Alcan envelopes through the government post office at public expense?
HON. MR. ROGERS: No, Mr. Speaker, I cannot explain that, but I will endeavour to get the answer and bring it back to the House. It is news to me. I thank the member for bringing the information forward.
MR. HOWARD: Who's running this show? Alcan? I ask the minister whether he considers himself to be a wholly owned subsidiary of Alcan.
I ask the minister, in seeking to find the answer to that earlier question about which he didn't have any previous knowledge — I doubt very much whether he didn't — at the
[ Page 2944 ]
same time to explain why the government makes assistance available to Alcan, in pursuance of its cause, and refuses possible assistance to the general public in the pursuance of the general public's cause.
HON. MR. ROGERS: I am following the stated policy of the government.
STATUS OF WOMEN COUNCIL FUNDING
MS. BROWN: A question for the Attorney General, Mr. Speaker. Can the Attorney-General confirm that continued funding for the Vancouver Status of Women council for the upcoming fiscal year is going to be protected?
[2:15]
HON. MR. SMITH: The member understands, I think, that I can confirm no funding for the 1984-85 fiscal year. We're doing estimates today of the 1983-84 fiscal year that has yet to be completed. No final decisions on any kind of grant funding for 1984-85 in my ministry have been made. While I would like to be able to say something more reassuring, I am unable to confirm any of the funding at this time.
BCILA CONCERNS OVER
TREE-FARM LICENCES
MR. SKELLY: I have a question for the Minister of Forests. At recent hearings into the granting of a tree-farm licence to CanFor Ltd. in Chetwynd, the B.C. Independent Logging Association asked that the hearings be adjourned until a full public review had been conducted into the impact of these licences on communities in the interior of the province. Has the minister agreed to the BCILA request, and has he decided to suspend the process of granting these treefarm licences until a full public review has been conducted?
HON. MR. WATERLAND: No.
MR. SKELLY: Supplementary to the Minister of Forests. In Hansard of June 29, 1978, the minister stated that before new licences are established, government agencies must forward plans, in order to prevent the development of land use conflicts which will later require withdrawals of licences after they have been granted. Will the minister advise whether the Ministries of Environment, Lands, Parks and Housing, Energy, Mines and Petroleum Resources and Agriculture have submitted plans with respect to the new rollover TFLs being proposed for the interior, and if so, why in the case of the CanFor TFL hearings in Chetwynd none of these agencies were present or submitted plans?
HON. MR. WATERLAND: Well, I'm afraid that in that mini-speech the member just made the question somehow got lost. I wonder if he'd ask me the question.
MR. SKELLY: I'm asking the minister if he intends to keep the promise he made in 1978 that in order to avoid the kinds of problems that appear to be developing in the proposed CanFor tree-farm licence, other government agencies involved in land use management be allowed to make their submissions to those hearings openly and in public.
HON. MR. WATERLAND: There has always been a great degree of cooperation between my ministry and other ministries involved in land use decisions, and I'm sure that will continue in the future.
MR. SKELLY: Clearly the cooperation is between ministries and not between the minister and the public, Mr. Speaker.
I have a further question for the Premier. The B.C. Independent Logging Association has written to the Premier on a number of occasions — March 16, 1983; July 13, 1983; September 7, 1983 — requesting a meeting to outline their concerns over such issues as contracting clauses in the interior and the granting of rollover tree-farm licences. Is the Premier prepared to say why he has not acknowledged the letters of the BCILA or agreed to meet with them to discuss these issues?
HON. MR. BENNETT: All matters relating to particular ministries are referred to the ministers. It has not been my policy to try to develop policy in isolation or in absence of the ministries. Their policy decisions come to cabinet where they are given my consideration as well as the consideration of others.
MR. SKELLY: A supplementary to the Premier. Between the dates when the BCILA first wrote to the Premier and today's date, has the Premier ever met with the Council of Forest Industries and asked them to submit their proposals for forest management in British Columbia and in fact received proposals and suggestions from the Council of Forest Industries? I would be further interested if the Premier would answer this question: have any of those people who have applied for rollover tree-farm licences in the interior also donated money to the Social Credit Party for the last election campaign?
HON. MR. BENNETT: Again, any matters relating to the Forests ministry would be dealt with by the Forests minister. No, I have no idea who donates to any political party. I know that member is out soliciting funds for his leadership campaign, and he is probably making a list of those who give and don't give to him, but we don't operate that way.
DAVID THOMPSON UNIVERSITY CENTRE
MR. NICOLSON: My question is to the Minister of Education. Has the Minister of Education written at any time in the past six months or communicated information to either the president of the University of Victoria or to the administrator of Selkirk College stating that the success of the David Thompson University Centre warrants its continuation?
HON. MR. HEINRICH: The answer is yes. I did about six months ago, but times have changed.
MR. NICOLSON: I've been assured by the office of the Ministry of Universities, Science and Communications that funds were allocated for the university component of the David Thompson University Centre. In view of the fact that those funds were allocated, will the minister advise why he
[ Page 2945 ]
unilaterally decided to kill David Thompson University Centre?
HON. MR. HEINRICH: Mr. Speaker, this is a government decision which I wholly support, and there are a number of reasons why it came to pass. The question would indicate an answer which would probably take up the rest of question period, but I think in fairness to other members I will keep it brief. It is sufficient to say that the cost of the operation was roughly double per student compared to all other colleges and institutes in British Columbia.
Secondly, the per capita cost within the area that the member referred to, Selkirk and the David Thompson University Centre, is roughly $276, and the provincial average is about $111. As a matter of fact, of the two adjoining colleges in the location of Selkirk and the David Thompson University Centre campus, I think East Kootenay is something like $118 per capita, and Okanagan is $105.
It was a difficult decision to make. At this time when there are in fact insufficient funds, it seems to me that in the interests of everyone we should preserve those colleges and institutes which are doing well and have a significant enrolment — not an enrolment of 370 full-time equivalents, 90 of which were on the university program. Selkirk College at Castlegar is not that far away, and the Rosemont campus at Nelson is in good hands.
CASCADE CREEK
MR. ROSE: Mr. Speaker, I'd like to direct a question to the Minister of Environment. It concerns the inundation of the Cascade Creek area in the Hatzic valley, with which the minister is undoubtedly familiar. I'd like to ask the minister whether he intends to amend his storm drainage guidelines so that the residents of this area will be able to qualify for provincial assistance. At the moment the deductibles are so high that it makes it virtually impossible for the residents to claim any damages from the province whatsoever.
HON. MR. BRUMMET: Mr. Speaker, we have some guidelines for disaster relief and we are doing everything possible. My staff is out there trying to accommodate the people and are taking everything into consideration, but we can't totally abandon the guidelines.
MR. ROSE: Mr. Speaker, we are not asking the minister to abandon his guidelines, but the matter is that the upfront money has to come from the residents before they can qualify for provincial assistance, and most of them can't afford it.
Has the minister considered that the portion that the province would pay could be awarded according to the assessed damages — say at 75 percent or 80 percent — regardless of whether the residents put up the money in the beginning or later?
HON. MR. BRUMMET: I'm not quite clear what the member is asking. I know that we have asked people to submit their applications for damages, and we have assessors and appraisers looking at them as quickly as possible, particularly with respect to the land damage. Every effort is being make to get that money out to them as quickly as possible.
MR. ROSE: Will the minister assure the House, Mr. Speaker, that the residents will not, in order to qualify, be required to put up their portion first, before any government money comes into that area?
HON. MR. BRUMMET: I don't think I can give that assurance. Some people may already have spent some money to fix up something, so how can I say that they shouldn't spend anything until the government money is there? I have assured the member that we will get the money to these people as quickly as we can. Every effort is being made to process the applications, with the cooperation of the municipality and the regional district, as quickly as possible.
MR. ROSE: Mr. Speaker, a final supplementary — I said that the last time but it really is this time. The allocation for bridge repairs under that same fund has been increased to $350,000 from about $170,000. Is the Ministry of Highways going to be asked to put up the deductible in that case? We're saying that it's fine for those people who can afford to put up their portion of the money, but will the minister not use that as an excuse to deprive those who can't of the provincial responsibility share?
HON. MR. BRUMMET: Mr. Speaker, I was under the impression that the money for the Ministry of Highways comes from the same government that the money for disaster relief comes from.
Hon. Mr. McClelland tabled the annual report of the Ministry of Labour for 1982-83.
MR. SPEAKER: Hon. members, the Chair has been advised that there are two matters to be dealt with at this time. In deference to that, I will come back to the Provincial Secretary after I recognize the member for Nelson-Creston.
MR. NICOLSON: Mr. Speaker, I ask leave to make a motion for the adjournment of the House for the purpose of discussing a definite matter of urgent public importance. Briefly stated, the matter is the economic crisis in the Nelson region, where unemployment is in excess of 25 percent and the government has announced its intention to close the David Thompson University Centre without consultation with the community or consideration of the economic impact. As a further delay to consideration of this matter will force students to make alternate educational plans, I feel that this matter is urgent and should be debated forthwith.
MR. SPEAKER: The Chair will undertake to review the submission and bring a response back to the House at the earliest opportunity, without affecting the member's urgency aspect.
MR. SKELLY: I also rise under standing order 35 to ask leave to move an adjournment of the House to discuss a definite matter of urgent public importance. The matter relates to the rolling over of forest licences into tree-farm licences, which will transfer control of millions of hectares of provincial lands, including lands not considered productive forest lands, to private administration. This transfer is taking place without sufficient public analysis as to the costs and benefits to our citizens, and there is clear evidence that jobs will be lost both in the government and in the private sector,
[ Page 2946 ]
and that returns to the treasury will be decreased, forcing further cuts in government services to the people.
Mr. Speaker, at the truck loggers' recent convention the minister announced that new tree-farm licences would be granted in spite of the deficiencies in information and in the public involvement process. For this reason I would urge that you consider this a matter of extreme and urgent public importance.
[2:30]
MR. SPEAKER: Thank you, hon. member. As undertaken earlier, I will bring a response back to the House at the earliest opportunity, without prejudice to the urgency aspect.
Hon. Mr. Chabot tabled the following reports: the forty-eighth annual report of the business done in pursuance of the Pension (Public Service) Act for the year ended March 31, 1983; the forty-second annual report of the business done in pursuance of the Pension (Teachers) Act for the year ended December 31, 1982; the forty-fourth annual report of the business done in pursuance of the Pension (Municipal) Act for the year ended December 31, 1982; the twenty-eighth annual report of the business done in pursuance of the Legislative Assembly Allowances and Pension Act, Part II, for the year ended March 31, 1983; the seventh annual report of the business done in pursuance of the Public Service Benefit Plan Act for the year ended March 31, 1983.
Hon. Mr. McGeer tabled the following reports: the annual report of the Ministry of Universities, Science and Communications; the ninth annual report of the Universities Council of British Columbia; the third annual report of the Knowledge Network of British Columbia.
Hon. Mr. Brummet tabled the following reports: the annual report of the Ministry of Lands, Parks and Housing for 1982-83; the annual report of the Ministry of Environment for 1982-83; the annual report of the British Columbia Housing Management Commission for 1982; the annual report of the salmonid enhancement program for 1982.
Hon. Mr. Rogers tabled the annual report for 1981-82 of the British Columbia Utilities Commission.
MR. SPEAKER: Hon. members, the Chair tables the annual audit of the office of the auditor-general.
Orders of the Day
HON. MR. GARDOM: Mr. Speaker, before calling Committee of Supply, I'm sure all hon. members, including those who are not aware, would like to express the very best wishes for a speedy and complete recovery to the second member for Vancouver East (Mr. Macdonald), who has been slightly under the weather recently.
The House in Committee of Supply; Mr. Strachan in the chair.
ESTIMATES: MINISTRY OF FINANCE
On vote 34: minister's office, $172,432.
HON. MR. CURTIS: Mr. Chairman, I look forward to.... [Applause] They're just hoping their expenditure requests for the next fiscal year are approved.
I look forward to answering questions of the committee over the course of the coming hours.
MR. STUPICH: Mr. Chairman, I can appreciate that the minister is somewhat embarrassed. Certainly anyone would be, I would think, to have been in his position in the past four years. I can understand why he would like to have vote 34 swept under the rug and dealt with very quickly indeed.
Interjections.
MR. STUPICH: I'm not hearing all these remarks, and I'm afraid I might be missing something.
I recall, for example, the minister on two occasions — the two most recent budget speeches — telling us that B.C. was going to lead the nation in growth by every measure; the economic growth in the province would be greater than in any other province in Canada; we would show Canada the way. We have been leaders in some ways, and I would like to make a few points about that.
Contrary to the minister's approach to this, I think it's important enough that we do take some time to discuss it. I intend to take just a few minutes running over the financial picture and some of the things that the minister has said — not what he said today, but on previous occasions. I expect my colleagues will have something to say, and I expect others, including myself, will have some specific questions as well. But we don't intend that the vote will pass as quickly as the minister might hope.
I recall the budget presented in the House on July 7, when the minister said, supported by the Premier.... He went around the province saying that B.C. was going to lead the country in economic growth if his party was re-elected to office. I'm certain that in saying that they really believed that that would be the case and B.C. would be the leader. Certainly the Premier in his budget....
Interjection.
MR. STUPICH: Mr. Chairman, if the Premier wants to get up on his feet and ask me a question, which he'll have an opportunity to do, I'll be only too happy to deal with it. But I feel that remarks should be made through you to the others, and if anyone over there wants to ask me a question, the proper way is for that person to get your attention, to address you, to have the question put to me through you, and I'll deal with it in that way.
To get back to my point of the Premier and the Minister of Finance talking about what a great future there was for the province of British Columbia in economic growth, he did the same thing in 1982 — I believe the date was March 29. I'm not sure; I'm forgetting what day in March the budget was. Certainly in 1983 it was July 7. Yet we find that the minister's own friends — the government's own friends at least, friends of the party in power — are complaining that that is not happening.
[ Page 2947 ]
Very recently there was a newspaper story in the Province, dated Friday, January 27. "B.C. Facing 'Slow Growth.' British Columbia is facing another year of slow growth, according to the Employers' Council of B.C." One would expect that if that particular organization was going to say anything at all about what this government was doing it would be doing its best to say good, helpful things, rather than complaining that under the party in power B.C. is going to be leading the nation backward, not forward, and that our record is likely to go on being worse than that of almost any other province in the country. This story goes on to say: "In a study to be released next week, the council predicts the B.C. economy will grow by 2.8 percent, below the 3.3 percent level forecast for Canada as a whole by the Conference Board earlier this week and immediately attacked by Finance Minister Marc Lalonde as too gloomy."
I would like the Minister of Finance, if he can, to stand up today and tell us that the picture presented to the citizens of British Columbia by the Employers' Council is too gloomy, if he has information to share with us today in the House, to share with the public outside of the House, information that will make everyone believe that the Employers' Council conclusions are too gloomy, and that B.C. will be much better off than is predicted in this story. I certainly would like to be reassured by the minister that such is the case.
I wish, and I'm sure the minister wishes, that he could stand up and tell us that. I myself would have some difficulty in believing the minister if he did tell us that. Not that I would suggest for one moment that he would deliberately mislead me — or you, Mr. Chairman. I'm thinking of his predilection in the past to present political documents as budgets — politically inspired documents that were in no way related to actual fiscal or financial estimates of what was actually going to happen in the province. They were political documents designed to win elections or to make excuses for something not having happened in the way the minister had said it would happen.
Interjection.
MR. STUPICH: Not that particular minister. We can't say that that particular individual, in his office as Minister of Finance, had two budgets. But there was one, as the member for Comox (Ms. Sanford) points out. The very first Minister of Finance under the new Social Credit administration did produce two budgets, one following the other by 10 days. Most of the figures were the same, but some of the words were substantially changed.
MS. SANFORD: Political.
MR. STUPICH: That was indeed a political document, but the figures themselves were not that bad. They did bear some relationship to what actually happened. But the figures presented by the current minister during the past four years, all four budgets.... I've said this on previous occasions, and given him the opportunity to comment, to explain, or at least to show some interest. Up to this point he hasn't, and so I will try again.
You will recall, Mr. Chairman, that in 1981 we were told there was going to be a balanced budget. But when the budget came out in 1982, I believe, with the figures showing what was happening over a three-year period, 1981 actually showed a cash drawdown of some $330 million. You will recall, Mr. Chairman, that in 1982 not only were we told we were going to catch up the $330 million that we drew down the year before, but there would be a further surplus of, I think, some $290 million. In other words, the actual surplus for that one year would be in excess of $600 million. You will recall that once again we drew down our cash reserves by some $280 million. Worst of all by this minister, you will recall that the budget for 1983 predicted a balanced budget, yet the latest figures released by the minister show he was $978 million out — almost $1 billion out.
Surely this bears some comment. Some people on that side of the House need some help from the minister in explaining finances. There are still some people on that side of the House who think it was the NDP that created debt in the province. I wouldn't be a bit surprised if there are still one or two over there who think that when we left office there actually was a debt in the public accounts of the province. Some of them probably haven't had the opportunity to read public accounts and to learn that the orders-in-council creating debt, for the first time in the history of the province since February 1952, came on March 31, 1976, three and a third months after the NDP administration went out of office.
I think these things are worth explaining. I think the minister should tell us about them. The minister might want to comment, for example, on the way he and the government have complained about the rate at which the federal government is leading us along this path to greater and greater debt, with little to show for it. But what about the provincial government? What's been the history of the province as far as the provincial government is concerned? Speaking again from the point of view of debt, I remember saying on a previous occasion — again, the minister at the time didn't think it wasn't worth commenting on — that it took us 104 years in the province of British Columbia — that is, up until the end of 1975 — for the gross public debt, including contingent liabilities, to add up to a total of $4 billion by December 31, 1975, and it took the present Social Credit administration only seven years to almost quadruple that figure. That's some achievement. What do they have to show for it? The minister doesn't even think it's worth commenting on.
[2:45]
There wasn't much warning that we were going to be dealing with Finance estimates today, Mr. Chairman. That's not a complaint; that's the way the game is played and we accept that. I just picked up at random some press releases that have come from the Premier's office that are in a file presented to me by my secretary. I had a whole list of them here, each one of them indicating one more way in which the government was adding to the provincial debt and one more way in which it was borrowing money: the issuing of parity bonds, borrowing $200 million from the Bank of Commerce. To the best of my knowledge, that's the first time it's been done in quite that way.
Under the old Social Credit administration, it used to be that Crown corporations borrowed money internally by selling parity bonds. By the time the NDP were elected, there was a substantial amount of money outstanding by way of parity bonds — some $228 million. But the bulk of that money owed was in the province of British Columbia; we owed it to ourselves. We were a bit concerned because these bonds could be called at any time, that there could be a run on the bank and they might all be called at once. The advice from staff was that it was simply too high a figure for the economy
[ Page 2948 ]
of British Columbia to stand. So the advice from the ministry staff at the time was to reduce that figure.
Mr. Chairman, I'd be willing to wager that there isn't anyone on the Social Credit side of the House who recalls that we did not increase the debt of the province. We reduced the direct debt. We reduced the parity bonds outstanding. There was $228 million outstanding when we reached office. There was $125 million outstanding when we left office. Probably by now it's all been cashed in. Interest rates went up after that and people cashed them in. But we set about a deliberate policy of actually reducing government debt rather than simply piling debt upon debt, as the minister is doing. There was one handed to me just today by my colleague from Burnaby North (Mrs. Dailly), which said: "Finance minister Hugh Curtis today announced cabinet approval of a Canadian $24 million borrowing by the province from the Industrial Bank of Japan." There's nothing wrong with borrowing from Japan; it's another place where we can borrow money. My point is that never before have we had to go to Japan to borrow money. It's only because we have a Social Credit administration in office in the province of British Columbia that we seem to have to go all over the world looking for ways in which we can borrow more money.
Mr. Chairman, do you remember the story in 1976-77 when the then minister pulled off a coup? He didn't go and borrow money; he sold three ferries. We are going to be paying for them for a period of 18 years. We're going to be paying $90 million for ferries for which we received some $37 million. It cost a great deal. You can call that borrowing money. We sold ferries and we're going to be buying them back for a period of 18 years. Apparently we're doing the same thing now. We're not doing it with railroad cars, believe. I had a very quick look at this press release that shows we're doing the same thing with some of the railroad cars that are shipping coal out of the Tumbler Ridge area.
Treasury bills and bonds are being issued. We haven't dared go the route that W.A.C. Bennett went when he issued the parity bonds. The parity bonds were instant debt in that the holder could at any time call on the government to pay back those funds. This government knows that its financial credibility stands so low that it doesn't dare issue any bonds that can be cashed at any time without notice.
I have some concern about the way in which this government is handling the finances of the province of British Columbia. The most recent reflection of that was the drop in our credit rating — not a large drop; nevertheless a drop. At the time the drop was said to be because of the apparently uncontrolled rate of growth of our total debt between the public debt and the Crown corporation debt. There was no control over it. It was just running on and on. The minister and the government were apparently helpless or perhaps preferred not to do anything at all about it and were not showing any real concern.
It used to be the tradition, before that member entered the House — I've been here a little longer than he has — that when a minister introduced the estimates of his own salary vote he would stand up and tell us something about what was going on in his ministry. In the case of the Minister of Finance in those days, he would tell us something about what was happening in the province. Certainly it was done in the budget in printed form. But he would then go on in presenting his estimates to elaborate on some points, give us some hope — whether there was real hope or not — for the future, and give us caution. It was generally more caution than hope from
W.A. C. Bennett; that was his style. But at least he led into a discussion of his salary vote by going through the motions of suggesting to the members of the House that there was some rational reason for voting his salary. This minister gave us no reason to vote in favour of his salary. He simply said: "Well, there they are. We're 11 months through the year. Why not approve them?" Mr. Chairman, unless he has a little bit more to say in favour of paying his salary than simply the fact that the fiscal year is 11 months gone, I think the minister hasn't earned the right to get that salary.
HON. MR. CURTIS: Mr. Chairman, I'd like to deal with some of the points raised by the hon. member for Nanaimo. He covered a fair variety of points, some of which we have debated before in Committee of Supply. I indicated in my opening remarks, brief though they were, that I would be prepared to discuss the estimates of the Ministry of Finance and the amount voted for my salary over the course of the coming hours. If that is the committee's wish, I'll be quite happy to do it. I certainly did not expect that there would not be some debate.
I would first refer the member to the forty-third edition of the Financial and Economic Review, which is one of the longer-lasting documents in financial reporting in the province. Last year's issue is the forty-third edition, and it has continued over that number of years as a complete review of the year just ending. The reason I mention it is that all members of the committee, including the member for Nanaimo, may want to examine some of the remarks that are contained in it. This is not a political document, in the way that some material presented to the House is; rather, this is a ministry report on the financial and economic status of the province for a particular period.
Facing page 3 — not identified as page 2 — is a very concise summary of the anatomy of the 1981-82 recession, and I commend that to the committee. It shows that that which the member spoke of in the early part of his remarks — that is, the decline in gross provincial product — was 12 percent through the period of the recession. It is correct to say — and this is the point that this government has made, and, indeed, made in the course of the election campaign in 1983 — that the economy suffered very severely through that recessionary period. One observer made the comment that the economy was in free fall. Certainly it was dramatic, severe and sudden. It was made all the more so by the fact that we had missed, if you will, the 1980-81 recession which hit most of North America. To emphasize that point, I would refer the committee and the member to the second quarterly financial report for fiscal '83-84, which shows how rapidly our economic stats had increased as opposed to Canada as a whole in the period '79-80 and to the latter part of 1981. Then occurred that very dramatic decline of approximately 12 percent.
Well, we have started up again, and that is not just the hope; it is the commitment we have made to the people of this province, the commitment I can make again today as my estimates are debated, and the commitment every member of our government can make. It's far more than hope; it's a clear indication that the drama of the recession is behind us. There are difficulties ahead, there can be no doubt about that. There are uncertainties.
MR. LEA: What are they?
[ Page 2949 ]
HON. MR. CURTIS: I hear an interjection from the newly reformed constructive member for Prince Rupert — reportedly. The uncertainties, he knows as well as I, are interest rates in the United States, the recovery in the rest of the world where we trade, and therefore the health of our export market.
It's sufficient to say, though, with respect to the forecasts we now have.... The hon. member for Nanaimo spoke about the Conference Board forecast. I think he knows as well as I, and as well as all members of this House, that forecasts vary from organization to organization and from individual to individual. As I see it, the Conference Board of Canada in its most recent forecast is the most pessimistic of a group of several who offered their views with respect to the economic growth of the country. The same would apply to the economic growth in any particular province. We see the Conference Board number which we have both discussed. Data Resources of Canada is forecasting 5.1 percent for 1984. The economists associated with the Bank of Nova Scotia forecast 4.5 percent. Dominion Securities Ames' economists are looking at 3.8 percent. The Toronto Dominion Bank is proposing 4.2 percent. Again, all of these are national rates of growth. McLeod, Young, Weir and Co. Ltd. forecast 4.5 percent. The Royal Bank of Canada, I believe in its Econoscope magazine, is forecasting 4.9 percent. The Economic Council of Canada is forecasting 4.3 percent.
Yes, my counterpart in the government of Canada said that the Conference Board forecast was pessimistic. I think he said "too gloomy." I am perhaps not quoting him completely correctly, but nonetheless the Conference Board of Canada forecast as very recently released is the lowest of all the indicators or all of the agencies who make it their business to offer intelligent guesses with respect to economic growth in the country and its regions and its provinces.
[3:00]
The point is, Mr. Chairman, that in the seven and a half months, approximately, since the 1983-84 budget was presented, our forecasts have varied relatively little, but as they have varied so have those of other agencies, private and public, who examine the economic health of the province, other provinces and the country.
The member spoke about the parity bonds which were issued by the former Social Credit government. Yes, it is correct, I think, that there were those who were concerned with respect to the liability facing the provincial treasury from time to time. Nonetheless, that was a particularly useful and a particularly popular instrument for its time in the recent history of the province. In looking back on parity bonds, I think the member for Nanaimo would realize that we undertook a variation of parity bonds, and I emphasize "variation" because they weren't instantly cashable. That was the undertaking of the so-called housing bonds — the HAED bonds. They were quarterly cashable. Incidentally, the refunds on those have been insignificant. There has been very little in the way of cashing those in, notwithstanding the change in interest rates in the interval. But that sale was extremely successful, and I think the only difficulty we had was that the supply did not meet the demand in all parts of the province. Certainly a number of people were disappointed that they could not obtain the number of bonds which they had hoped. That was just a couple of years ago, and it was an undertaking which I enjoyed doing on behalf of the people of the province. I've been asked recently if we would do something similar at some time in the future, and while we have no particular plans to undertake the housing and employment development bonds in the immediate future — we have not discussed it — it is a possibility at some particular point.
The member also spoke about the provincial credit rating which is assigned to British Columbia Hydro by the U.S. firms of Moody's Investors Service Inc. and Standard and Poor. I said earlier in this session that of course I was disappointed that our credit rating was moved from a triple-A, the highest rating, to the next highest. We happen to believe — and I think events to come will indicate — that we still deserve the highest possible credit rating offered by those two firms. The interesting thing is that one would have expected that a downgrading of the credit rating by those two firms would have affected the yield required to be paid by B.C. Hydro in the United States market; not so in the Canadian market and not so in the European-U.S. dollar market.
It was just a number of weeks after the downward revision of the credit rating that we undertook a borrowing for B.C. Hydro, as the former government did from time to time, in the United States market, in U.S. dollars. The issue was eminently successful, and followed by another one later in the fall, perhaps even more successful, with no noticeable effect with respect to the coupon rate paid on those bonds as a result of the downgrading. Very recently, undertaking a commercial paper program in the United States, the same firms have assigned us the highest possible credit rating for the short-term paper. That is confidence. That has just occurred.
Mr. Chairman, I cannot forecast when a triple-A credit rating will be restored to British Columbia, but I do assure the committee, and I assure British Columbians, that I believe that we shall have very good reason to seek a restoration of that highest triple-A credit rating in the early future. I intend to do so.
MR. LEA: Mr. Chairman, I suppose one of the things that as legislators we have to deal with is that the budget we're now discussing really was brought in in July 1983 and that at the time the government and the minister currently under discussion were saying that that budget was going to help economic recovery in the province. So I'm not going to compare us to other provinces, although when you do that the government doesn't come out looking that well. But oftentimes it's like comparing apples and oranges because of the different economies between one province and another. For instance, in Ontario, where they have more of a manufacturing base, it's understandable that their economy is going to pick up a little more quickly than an open economy like ours that deals strictly in extraction and selling, with some secondary and tertiary applications into the international marketplace.
But we can compare B.C. to B.C. I think that's a fair kind of analysis to do. And when you start taking a look at the statistics comparing B.C. to B.C. and what's happened to us since the introduction of that budget, we don't come out that well. Going back to June 1983, and working it up to December, there were 1.2 million people employed, and almost 181,000 out of work at that time. Then you go to July, and we have 10,000 less employed. Then you go from July to August — 27,000 more unemployed. In September there were 16,000 more unemployed; October, 18,000 more not employed. There was a slight increase by 8,000 in December 1983. The unemployed level has remained fairly constant. As I said, it was 180,000 in June. It went up to 183,000 in July, 188,000 immediately after the budget in July, then back
[ Page 2950 ]
down to 172,000, then down to 167,000. In November it went back up to that July figure of 183,000, and in December again 183,000 unemployed. In percentage terms in December we had 13.7 of our employable work force unemployed. In June 1983 it was 13.1 percent. So we have a higher rate of unemployed now in November and December 1983 than we had when the budget was brought in. So that's comparing oranges with oranges.
The government could say: "Well, if we hadn't done what we were going to do, things would have been worse." And that's always a rather intangible thing to discuss: how much worse it would have been. But obviously, the recovery that was supposed to have come about because of the budget did not come about. You can follow it up with statistic after statistic. You can look at bankruptcies. Consumer bankruptcies in the year 1982 were 2,085. In 1983 they were 2,652 — an increase of 27.19 per cent. Business bankruptcies in 1982 were 1,042. In 1983 they were 1,279 — an increase of 22.74 per cent, bringing the total increase in bankruptcies — taking both of them in — to an increase of 25.71 per cent. Again, comparing oranges to oranges it doesn't took like a great economic recovery; in fact, it looks just the other way around. It was supposed to be restraint equals recovery, and in some cases it looks like restraint equals more recession. Then you take a look at the rest of Canada and compare bankruptcies. The total aggregate of bankruptcies in the rest of Canada decreased by 13.4 percent where ours went up 25.71 percent.
You cannot really look at the economic figures coming in since the budget and have any degree of confidence that the budget helped bring around economic recovery. All the indicators would indicate that exactly the opposite is happening.
What disturbs me more than some of the figures we're looking at, Mr. Chairman, is that when the minister makes his remarks to the House, I have the feeling that I'm listening to someone who is only concerned with bookkeeping and not economics; not looking at our future with any sort of vision. After the minister had said "Things aren't that rosy; we're still going to have our troubles," I interjected: "What kind of troubles?" He then went into the fact that if only the economy in the United States would pick up, if housing starts would pick up, then our economy would be well on the way to recovery.
It's very difficult to relate those remarks to the facts. The fact of the matter is that we have a forest industry in this province that is in crisis, both in the short term and in the long term. We have a fishing industry that is in crisis, both in the short term and in the long term. We have a mining industry in crisis both in the short term and in the long term. For the minister not to deal with an economic vision of what he sees as the solutions to some of these crises in our major industries indicates to me that we're getting a bookkeeper's report instead of an economic vision coming from the government.
I'd like to deal for a few moments with some of the problems that I see in those industries, and the problems that are not being addressed by this government.
In the short term the government is struggling to get some economic activity going, and that's laudable, but I think we have to understand first of all the economic levers that are available to us as a province. We have limited economic levers. Many of the economic levers that are needed to manipulate an economy are not within our jurisdiction, but within the federal jurisdiction: interest rates, tariffs, exchange controls and money supply. None of those are here, so we're left with limited economic levers, and I think the provincial government can only be judged by those economic levers that they have some jurisdiction over. I know we all like to criticize and take credit for economic levers that we don't really have any power over.
So what are the economic levers that a provincial government has? They have the ability to raise taxes. They have taxation policies that they can put in effect which will have some economic impact on our province. They also have the opportunity to spend that money, and they can be judged on how they spend the money. Other than raising and spending money, which governments at the provincial level should be judged on, they have one other lever which they can put into effect: resource management. There has not been one word from the Minister of Finance, who is the chief steward of our economy, about those economic levers and what the government is doing to enhance our economy through those economic levers.
No one can argue that when revenues are not coming in because of a slowdown in the economy you obviously can't spend the kind of money that you'd like to, or possibly that you have in the past. There is no doubt that people in the province want some restraint in government spending. But I think it is also obvious that the people in this province want restraint that's applied in a commonsense way and that has some fairness about it. That's really what they want. So restraint with fairness is the object, I would think.
[3:15]
If you're not going to have the same amount of dollars to spend but you still demand that you're going to keep your level of services at an acceptable level, then you have only two options: you can let those service levels fall to an unacceptable level, or you can look at two other means of keeping them at that acceptable level. You can either borrow money or you can do some extra taxation in order to keep those levels up, or you can do a combination of both — you can borrow some money and you can tax.
I for one am not going to stand up and say that during these recessionary times the government shouldn't go out and borrow money to keep those services at a proper level. I don't think anybody would say that. But I think we also have to take a look at some taxation. Obviously we don't want to tax corporations where there is a chance that we're going to hurt economic recovery, so I think we have to take a look at it case by case and ask where we can apply some taxation that won't hurt economic recovery. There are profits that we should be taxing and bringing into the central treasury to help keep those services up. I would suggest taking a look at the banks, which are making extraordinary profits. It seems rather strange that they're doing that when everyone else is not. When the interest rates were high the banks were making all sorts of money. Now that the interest rates are lower the banks are making even more money. Obviously we have to take a look at taxing in some areas such as the banks.
When you start taking a took at some of the figures, it's astounding; for instance, if you look at the aggregate tax rate on chartered banks — and these are national figures — the Bank of Montreal had a pre-tax income of $239 million. They paid no tax at all; the tax rate was zero. The Bank of Nova Scotia had a tax rate of 15.6 percent; the Toronto-Dominion had 16.1 percent; the Royal Bank of Canada had zero; the Canadian Imperial Bank of Commerce had 20.2 percent. The
[ Page 2951 ]
aggregate average of the tax rate on the Canadian banks was 8.5 percent, when they themselves admit that they're making greater profits than ever before. I think that the citizens of the country would be glad to pay an 8.5 aggregate amount of tax on our profits or on our earnings. We would only be too happy to. So I think the government has an obligation to take a look at the banking system in this province and in this country and raise some revenue from the banks.
Also, I think we have to take a look at certain income earners. There is no magic solution or quick fix in the short term to get our economy where we would like to have it. In the long term I think there is great room for optimism if we apply ourselves cooperatively and diligently to the task, but in the short term you can't go out and create an economy that isn't there that doesn't make sense. There's no doubt that in the short term we're going to have to share a little with each other as citizens. Whether we are corporate citizens or individual citizens, we have an obligation during bad times to share. It seems incongruous to me that we would ask some of our citizens to live on $8,000 to $12,000 a year, which oftentimes is the complete family income, when other citizens are living on $75,000, $80,000, $100,000 and $500,000 incomes. I'm not saying to straighten it right across the board, but I think the government would find a much better reception to its restraint program if people could see that it was applied fairly.
It's not moral to allow some people to make three trips to Hawaii in a year when some people can't make a trip to the dentist; that just doesn't seem to be fair. Until we can turn our economy around I can see no other choice but for citizens in this province and in this country to share with each other and to accept restraint, but only if it's applied evenly and fairly throughout society. I don't think the government has done that. What they're doing is saying that those of us who are working will opt for economic recovery at the expense of the few. That is wrong, but that's what the government's restraint program is doing.
Mr. Chairman, I would also like to take a look at the government's spending. First of all, I would like to deal with some of the long-term problems in our economy. One of the ironies is that if we do restructure our economy to meet new demands in the international marketplace, we're going to have to start applying new technologies more and more both to our extraction and to our processing and manufacturing section. The irony is that if we're successful in that endeavour, then we are going to be looking at jobless wealth creation, and by our economic recovery and restructuring we are going to be putting people out of work exponentially in processing and manufacturing, in office work and in middle management. People are going to be disappearing into the unemployment figures exponentially if we're successful in turning and restructuring our economy to be a healthy vibrant economy. It's one of those ironies for us. In the long term, though, it's something that has to be done, and there's not one word from the minister about those horrendous structural problems that we have in our economy, which are bringing around structural unemployment. It's going to increase.
Mr. Chairman, if we have an economic future in this province, one of the areas we are going to have to apply ourselves to is education. Any investment in education is a good investment, because an investment in our people, their training and their education has the potential of returning great wealth to us in the future.
It doesn't have to be exotica either. I met a guy on the ferry who is an out-of-work welder. He wanted to go back to school in this out-of-work period and upgrade his skills as a welder, but the courses that were available during good times are not available during bad times. That's like cutting your nose off to spite your face. We should enhance those programs during bad times. When we have people out of work, obviously it's an opportune time for retraining, training and education generally.
You know, we don't come out too well compared with other provinces in what we spend on a percentage basis out of our economy for education. We are very low. The percentage of the total budget that goes into education from all provinces is 21.2 percent. In this province it's 15.5 percent. So we're behind the aggregate. And when you start comparing us to places like Newfoundland, which is a comparatively poor province.... They're putting 25.3 percent of their budget into education compared to our 15.5 percent; Prince Edward Island, 24.1; Nova Scotia, 24; Ontario, 20.6; Alberta, 17.6; Saskatchewan, 15.9; Manitoba, 18.3. We're lagging behind in the very area that we should be applying ourselves to. If we have a future, our economic future at this point is not so much in investing in capital assets but in investing in human assets. That's really where it is.
If we had all the capital investment we wanted in this province — and this government is always talking about how we need capital investment to come into our province — we would have no idea as a society what to invest it in. Do we need more pulp mills? We can't sell the pulp we're producing now. Do we need more sawmills? We can't sell the lumber we're producing now. Our problem is that in those areas of production we do have, we cannot see where there's going to be a demand for those products that would cause us to go in and increase production. For any increase in demand, we have more than adequate supply in our economy already. We have done precious little research in this province to find out what direction we should go in — precious little effort, precious little money. We are way behind most of the other western democracies. On a percentage basis, out of our gross provincial product we put an alarming lack of money and effort into research. We have to have.... I'm not talking about a gigantic government, bureaucratic research program; what I'm talking about is getting research money in where it's going to be effective.
Most of that, I would suggest, would be in small and intermediate business areas. They are the ones historically which have shown us that they can be the innovators, that they come up with the ideas, that they're more efficient and that they're vibrant.
MR. MICHAEL: Good free-enterpriser.
MR. LEA: I'm talking about a market economy; you can call it what you want. I'm talking about the small enterprises in a market economy that have shown us the way in innovativeness and efficiency. I'm not suggesting that we should put a gigantic research program together that would either go to a government bureaucracy or to big corporate bureaucracies which have shown little in the way of being innovative. What they usually do with research money is make it a tax write-off on profits. The problem is that the companies that need it the most and the companies that have shown historically that they're the most innovative cannot use that kind of incentive because, in most cases, they're not
[ Page 2952 ]
making the kind of profit where they could write it off in the first place. Secondly, when they do get a good idea, they can't get any capital to follow it through, either working capital or for the capital assets.
For the Minister of Finance, the economic steward of this province, not to make some opening statements about some of the horrendous problems we face in restructuring our economy.... We know for a fact that if we're going to be successful we have to have a highly trained, highly skilled workforce. Much of that money should be going into the training of management. Much of that money should be going into the training of scientific skills that we're going to need if we're going to be able to do the research and then apply the research. It's incredible: no economic vision to deal with the problems.
[3:30]
Our mining industry. Our major product is copper. When you take a look at the new competition that's coming on stream from some of the other countries, like Chile and Zaire, and the fact that they're so heavily in debt that they're oftentimes selling their products in the international marketplace at below their cost of production just to get a balance of payments to pay off their debts, it's pretty hard for our mining industry to compete there. On top of that, many of the uses for copper are not going to be there any longer. I can think of things like fibre optics, which are taking the place of copper. A mining industry in crisis — there's not one word from the minister. A forest industry in crisis, especially on the coast, where there has been no investment to speak of back into the forest industry, so that we can utilize smaller wood, so that we can have better utilization of our forest industry.
Again the irony of ironies. A new sawmill in Port Alberni, with more modern technology, has the same output as the old sawmill but with half the workforce; a 100 percent increase in productivity but half the workforce is out of work. That's going to increase in the sawmill industry and in the pulp mill industry. As we modernize those plants, we're going to be putting people out of work. But we must modernize those plants. I'm not suggesting that we act like Luddites and try to destroy the technology. I think we should embrace new technology to make ourselves more competitive in the world, but we just can't put those workers out to dry. What we have to make sure of is that we have a taxation policy that will tax the yield from those new technologies. We are going to have to bring that money around through the taxation system, into our economy, and create worthwhile jobs with dignity in our society on the service side of the economy. What better place to create those jobs than in education? Have some immediate employment, which is always a nice result in a recession. But the downstream benefits from that kind of investment are incalculable. We know that if we have a future, that's where we have to put our money. When you look at the statistics, we are about six percentage points behind the aggregate amount in Canada.
It's not a case of being ashamed of ourselves — which I know we as a province are for having those kinds of figures staring us in the face. It's not only the social disgrace; it is economic stupidity in the long run.
Another reason why we in North America have been in such trouble over the years is that our wealth — we are no exception; we have a more open economy than most and are therefore more vulnerable — has been created in what is called high-volume standardized production. The old high-volume standardized production called for some pretty skilled people throughout the entire workforce. At one time the only thing that was exportable — and mobile — was capital. It could move around. The technocracy was not exportable because they could not get the skilled workers in third-world countries to apply themselves to that high-volume standardized production. Now, though, the new technologies are calling for very few skilled people on the top and unskilled or semi-skilled people as the majority of the workforce. We're losing those jobs out of our economy. They're going to third-world countries where there is cheap labour and often very few environmental standards. There is no way we can stop it. We cannot compete in the international marketplace any longer in high-volume standardized production. We must look at flexible production, and that calls for the very highly skilled, highly trained workforce that I was talking about — to do both the research and the development after we find out what we can produce that we can be competitive with in the world marketplace.
Those are real problems. They're not problems that we're dreaming up over here. I can't believe that they aren't problems that many members on the other side are aware of. I think we're all aware of them, as legislators. Maybe the Minister of Finance is the only one who isn't aware of it — or he doesn't want to face those horrendous structural problems in our economy. But they are there and they have to be dealt with. To leave the impression that high technology and an increased demand for our goods from the United States, especially in forest products, is going to be the answer to our economic future is just not true. It is evading the question. I think that the people in this province for the most part are ahead of us. They're ahead of their own government. They actually understand some of those problems out there much better than some people in government. If that is the case — and I suspect it is — we must look like horses' fools. We have to start talking about those problems and letting them we know we understand some of those basic structural problems in our economy and are prepared to deal with them.
I would like to deal with one more topic. I think we need an export corporation. The major companies in this province do a very good job, for the most part, of marketing their own goods, but little companies and intermediate companies who want to market in the world often find it difficult to do it on their own. They need an agency to do it for them. I am not suggesting a government bureaucracy — maybe only some seed money — but a corporation made up of representatives from those different sectors in the economy.
MR. CHAIRMAN: Honourable member, the time under standing orders has elapsed. There is another mechanism, as you are aware.
MR. LEA: I'll just sit down for a second and be right back up, because I would like to finish that thought.
MRS. WALLACE: I was very interested in what my colleague from Prince Rupert was saying, and I would certainly like him to continue. I would be very pleased if he would be able to carry on.
MR. LEA: I was talking about an export corporation. I see an export corporation put together that would enhance the availability of markets for intermediate and small business, especially in manufacturing and processing. I call it an export
[ Page 2953 ]
corporation for the lack of a better name. I want to describe its function.
By enhancing the availability of those world markets to our people, what we can do is to search out in the world more areas for the products that we make now. I think that's important. We're not just going to have our economic restructuring happen overnight; in the meantime we have to survive. So we have to have an export corporation that will look for new markets for those things we already produce. The export corporation I have in mind should also have another function: it should have the expertise available to it that as it goes out into the world, it looks for the possibility for new products that we can produce here, even if it is just an idea. If we had an effective research program in this province, that export corporation could go out into the world and bring those ideas back and dovetail them into our research program to see whether we couldn't develop it and develop a new product for a new market. It could come back with ideas that could possibly be put directly into one of our existing companies. This would enhance our output of goods into the international marketplace. It really is not being done with any amount of effort and not a lot of capital.
Again, that would be another investment in our economic future. Every time we look at investing money at this point, I think we have to keep in mind that we should be investing that money as much as possible into those areas that have the ability to pay back to us in the future a great deal more than the investment we're putting in today. Education is one of those areas that is very important. An export corporation is very important, but it has to be met with an effective research program when it arrives back here in British Columbia. Other nations are doing it much more effectively. Their governments help their business community a great deal more in searching out markets for those things they already produce and looking for new products that we could produce. We are lagging way behind in that area.
My biggest complaint about this minister, as we discuss his salary votes, is that I feel like I'm dealing with a bookkeeper. I'd like to feel I'm dealing with a bookkeeper and a person with an economic vision. I'd like to see the government share with us and with the people of this province their real concerns about our economic future and not to gloss it over with simplistic phrases like "recovery will come around through restraint." We have the statistics from the last budget till now proving that if it's going to happen, it surely isn't the most effective way to get economic recovery. I'd like to know which economic theorist put it forward in the first place. I think the people of this province need more vision from this government as to what the problems are, and what some of the solutions are.
[Mr. Pelton in the chair.]
In closing, Mr. Chairman, I think the government oftentimes is afraid to say, "We see these problems but we don't have any immediate answers, and if we don't have immediate answers the people will see us as not having all the answers and therefore will not look on us so favourably politically." I don't believe that. I believe the people in this province would be a lot happier if they just knew that we understood the problems. If they felt we understood them, they would have some patience with us, some time for us, and would say, "At least they understand the problems and they're working on them, and we've got a lot to offer." The people will say that.
It's not just government that has all the answers, not just big business. There are people in this province who have a lot of ideas — and a lot of good ideas. I don't feel the government is tapping in to those people. They feel that politically they have to come up with all the answers, and it's not possible. Nor is it desirable. An economic vision is what I was looking for; all I found was a bookkeeper.
HON. MR. CURTIS: I'd like to respond to a couple of the themes developed by the member for Prince Rupert. The hon. member spoke about the views of the people of the province and, in his closing remarks, about the fact that they have much to offer in the way of ideas with respect to improving British Columbia's economic health. I couldn't agree more that they do indeed have an interest in the future of the province, and that they have a host of suggestions to offer. That, Mr. Member, was the key motivation, among others, when I undertook a consultative process — an overworked phrase, I will admit, Mr. Chairman, but nonetheless something that has not been done that much in the last 12 to 15 years in British Columbia. I refer to meetings which I concluded just last week with a variety of groups covering the whole spectrum of activity in the province. It's a process which started approximately — and I can report on it with more accuracy, if that is the member's wish — in the latter part of November, and which continued, as I say, until just a few days ago: some 18 groups ranging all the way from the Employers' Council of British Columbia, the British Columbia Federation of Labour, the Mining Association of British Columbia, the education coalition, the British Columbia Chamber of Commerce. The list is a matter of public record. It certainly can be retrieved by that member's research offices, or I can provide it to him. I will be speaking about it in the course of the next few weeks.
I was hopeful that we would, through that process.... These meetings were not limited as to the amount of time we made available. We made ourselves available. Most meetings occurred in Victoria; a couple occurred in Vancouver. If the member checks with the organizations who went to the trouble of bringing their views together for discussion by themselves, and then of putting them in written form or in a combination of written and verbal presentation, I think that they had virtually unlimited time to identify problems in their particular areas of activity, and to speak about those as well as about the provincial economy as a whole. It was instructive for me. In the meetings one senior official of the Ministry of Finance was with me at all times, in order that the views expressed were not simply made to the political side of government, but also to the officials who carry out the policies which are developed by the government. The list really was very comprehensive.
[3:45]
I intend, Mr. Chairman, to do much more of that in 1984. I will start that again if the opportunity is appropriate. Depending on the business of the House and other matters, I intend to start that in mid to late summer, and to continue right through the fall; to make myself available not only in Victoria and Vancouver but in other parts of the province as well. We will hear again from the same groups, but I hope we can expand the list and can expand the geographic representation of those consultations. We did a great deal of listening and
[ Page 2954 ]
challenged some points which were offered. We have summarized all of them. They have been of assistance in preparing the 1984-85 budget, but contrary to the role of bookkeeping which the member has alluded to, I suggest that the views which have been expressed, and which I have shared with my colleagues in the cabinet and will share in greater detail through the course of the late winter and spring, will indicate that some of those views will serve British Columbia and British Columbians well for a number of years.
It is a process of open consultation, a process which I was pleased to be able to undertake on behalf on the government — quite apart from the contacts which are held by special groups with individual ministers. One would expect the representatives of the IWA, as an example, to meet with the Minister of Forests from time to time. One would expect the Council of Forest Industries to meet with the Minister of Forests from time to time. One would obviously expect, regardless of the party which has been elected to government, that the B.C. Federation of Agriculture would meet with the Minister of Agriculture. We didn't intrude in those discussions with the specific responsibilities of individual ministers. On the contrary, in the Ministry of Finance we attempted to understand in greater detail and on a more up-to-date basis the views of those organizations and individuals — those interest sectors in the province — with respect to policies which are developed by the Ministry of Finance and then forwarded for consideration by the Premier, the executive council and the government caucus.
A number of our discussions focused on the general tax burden in British Columbia, and I think that we also learned a great deal in that regard. We heard from most groups which came to us with respect to tax policies which may have been appropriate five, ten and fifteen years ago but which now have caused some difficulty for that particular activity.
The member spoke about an export corporation. Well, Mr. Chairman, looking to the member who raised it for his acknowledgement, and to you for guidance, the question of an export corporation is a matter surely that would be dealt with first, I would think, by the Minister of Industry and Small Business Development (Hon. Mr. Phillips), who is responsible for that particular area of activity, and then by the Premier in the course of the budget debate or the debate on the Premier's estimates. But rather than let the member think that I'm just dismissing the suggestion, clearly this government has recently placed great emphasis on more and more trade missions. The member himself said that this is an open economy and more open than most. Well, it's one of the most open economies. In my earlier interjection before he took his place in the debate, I did not say we are absolutely helpless against higher interest rates and the world economy but rather that those are important factors when one is functioning in an open economy. I think the member knows that I'm not identifying those as impossible obstacles with respect to the health of the province but rather putting them in perspective as significant factors in terms of the health of the province. Trade missions were the subject of some criticism, but if I were asked I would recommend to the Premier — and I think others would as well — that this government should accelerate and expand its trade missions, and indeed there is an indication already that that is occurring.
We have to get out in the world and meet our very aggressive competitors. We must get out and point out the advantages of doing business with British Columbia firms and individuals. On the basis of the success that I have seen in that area so far, it is clearly an extremely important undertaking by the government of the province on behalf of the people who live here and who want to come and work here.
I think one of the more attractive aspects of the trade missions which I have examined, and the one in which I participated, is the happy blending of private sector individuals and government representatives. It is not just a question of ministers moving to one particular region or country but rather taking along representatives of those areas of economic activity in the province which can be expanded and where we have a proven record and where we have expertise.
I indicated that I was not going to speak at length with respect to an export corporation, but I did not want to remain silent on the importance of the kind of international activity which this government has undertaken and which I am certain will be continued and, indeed, accelerated.
MR. STUPICH: Mr. Chairman, I'm at the point where I'm ready to ask a couple of questions. The minister introduced his budget on July 7 and I spoke on July 8, and on July 8 said that he was overestimating his deficit by some $500 million to $600 million, which of course at the time — July 8, 1983 — was an outrageous statement. It took the credit union economic analysis dated August to catch up somehow or other; I'm not suggesting they read what I had to say, but perhaps they worked it out on their own. They came up with a figure of some $500 million to $600 million, by coincidence. A columnist in the Vancouver Sun, Marjorie Nichols....
HON. MR. BENNETT: What are you going to do if they're wrong?
MR. STUPICH: Mr. Chairman, I'd love to answer that question, but I really believe that the proper way is for the Premier to have the intestinal fortitude to stand up on his feet and ask the question. Then I'll answer it.
On August 19, 1983, Marjorie Nichols in the Sun, in a headline column, said: "Books Say Things Not So Bad as Painted by Socreds." And, again, it was being said that the deficit projected by the minister was, as I had said on July 8, perhaps some $500 million to $600 million overstated.
Then in December or January someone else got into the act — Professor Laudadio. He produced figures, the minister responded to the figures, the professor responded to the response, and Marjorie Nichols got into the act again. None of them read my remarks. Nobody remembers that I said it on July 8, except me. My colleagues don't remember.
HON. MR. CURTIS: That's your problem, Dave, not ours.
MR. STUPICH: I know. I have a problem; I appreciate that. But the minister may recall me saying that.
HON. MR. CURTIS: I recall.
HON. MR. BENNETT: When you're leader they'll listen.
MR. STUPICH: Well, you have some personal experience in that area, and you're better qualified than me to comment on that.
May I simply say, Mr. Chairman, that the Premier — who insists on interrupting about something that has nothing at all
[ Page 2955 ]
to do with vote 34 — on October 8, eight days after the end of the second quarter, produced a printed quarterly report. Now that's some feat of legerdemain. It took some doing to get a printed report out. I see you frowning; actually, it was the second quarterly report produced by this government, and it was produced, I believe, within eight days.
Mr. Chairman, I don't want to make a big issue of that. I don't want to lose the minister's attention. That's not the point of my story. The point is that today is January 30. We are within, I would think, hours or days or, perhaps, a week — certainly no more than a fortnight — of being in a position to produce a third quarterly report. With that quarterly report in our hands, we will be much better able to talk to the minister about the minister's salary. If we were months away from it — if we were dealing with the estimates, as we should be, in March, April or May — I could say that it wouldn't make any sense to wait for the report that's going to come out in January or February. But, Mr. Chairman — whichever one of you is Chairman at the moment — it's January 30. We could have that third quarterly report in a matter of hours. Why is it that we're proceeding with the minister's vote today? I'm inclined to move a motion that we delay discussion of this until we have the third quarterly report, but I'd rather that the minister did that. I'd rather the minister say he just hadn't thought of it, that it just hadn't occurred to him that we're that close to having at our fingertips much more information that would be useful to us in discussing his salary vote, and let's put off discussion of this vote until we have that information.
MRS. WALLACE: Maybe that's why they're having it now.
MR. STUPICH: The member for Cowichan-Malahat is getting ahead of me. She's sitting behind me, but she's ahead of me. The obvious answer would seem to be that if the minister is not prepared to ask that we defer discussion of this until we get the quarterly report, he has some reason for wanting to get this discussion completed before we see that quarterly report.
There may be another reason. If there is another reason, I invite the minister to answer the question.
I've got one more question. I want to compliment the minister on his activity in consulting different groups in the community in the budgetary process. I honestly believe that is a forward step, and I hope it truly will be consultation, and I hope it will grow and be meaningful. I think that's good. I have a question that's somewhat related. While saying that I think the minister did the right thing in doing that, I am concerned about a newspaper report about what was described as a budget leak. To the best of my knowledge, the minister never commented upon the budget leak. It was a column by — again, I'm going to the newspapers for my stories — Allen Garr in the Province: "Sizeable Budget Leak Generated." It would appear....
Interjection.
MR. STUPICH: The minister of lands, forests, etc., said that I must have been reading. At least I can read; I don't have to hire people to read to me. I can read, and I did read this story: "Sizeable Budget Leak Generated." Now while I welcome budget consultation, and while even this, the minister may say, is not something terribly important, at least I do want him to be invited to comment upon it. Is it something that happened in error? Is it something that happened because it was important to get the information out quickly and it didn't really matter whether people knew in advance of the budget becoming public knowledge that they were being laid off? That programs were being slashed? That the government was going to be as draconian as it has proven to be in recent months? It didn't really matter that this was found out ahead of time, and therefore no harm was done? Was this a budget leak that was done intentionally so that people would have a few extra hours' foreknowledge that their jobs were going to be terminated? Just what was the explanation? Was this really a budget leak? If so, was it a budget leak that the minister himself considers important? If so, what steps did he take to inquire into it? As a result of his inquiry, did he feel that the buck stopped at some level below that of his own desk?
[4:00]
HON. MR. CURTIS: Frankly, Mr. Chairman, a budget leak, in the traditional British Commonwealth parliamentary sense, would be a matter which would cause me, without being requested, to tender my resignation from this portfolio to the Premier. We did analyze the claims that were made, with the notification to which the member has referred. We did analyze that, and I found that it did not constitute a leak in the usual sense.
Interjection.
HON. MR. CURTIS: The member for New Westminster (Mr. Cocke) has just arrived and interjects. The "usual sense" would be, in my view, with respect to a tax measure where some particular benefit might be gained. As I say, in the classic, in the typical, in the well-established British parliamentary tradition. In much the same way, I think were I the federal Minister of Finance, Mr. Lalonde, I would have found it incumbent upon me to resign after he was caught thumbing through the budget document with television cameras peering over his shoulder. We recall that from 1983.
I was confused by the theme developed by the member for Nanaimo (Mr. Stupich) when he spoke about the quarterly report. Incidentally, I think the member is a gentleman, an honourable member — we're all honourable members — and he will accept that when the House Leader of the government side says, "I would like your estimates to be dealt with on such and such a day," then that happens. That is why I'm here today, rather than this Thursday or Friday, or a week Wednesday, or whenever it may be. I wish that my estimates could have been dealt with much earlier than this, but that's not the case. I was confused by the member's statement regarding the quarterly report, because I think he is mistaken. The second quarterly report....
MR. STUPICH: It was 1976 or '77.
HON. MR. CURTIS: The member interjects: "1976 or '77." I understood him to be referring to 1983, because the second quarter closed on September 30, 1983, and the second quarterly report for 1983 was released on November 22. With a reporting process and with an expenditure and revenue system as large and complex as the third-largest provincial government in the country, Mr. Chairman, I expect my officials to work miracles, but I don't expect them to produce a quarterly report 8, 10 or 12 days following the close of that quarter.
[ Page 2956 ]
The next quarterly report, for the quarter ending December 31, is not yet in my hands, and is not likely to be for some little time. Here we are on January 30, and I think the member would acknowledge, on review, that we've usually had some five to six weeks intervening — occasionally a little more, but I target generally for something just under six weeks following the close of the quarter for the release of the next quarterly report. So if it's a question of discussing my estimates this week, Mr. Chairman, or next week, then I must indicate to the committee that the quarterly report would not be available for that particular discussion; not because I choose not to release it, but because it would simply not be in final form.
I do apologize if I did not hear the member for Nanaimo indicate that it was 1976 or 1977 to which he was referring.
I also want to point out that the member for Prince Rupert (Mr. Lea), who is not at the moment in his seat, spoke early in his remarks, and I didn't respond at that time, with respect to the bank tax, or taxing the banks, or, putting it another way, accessing revenues from the activities undertaken by banks in British Columbia. Mr. Chairman, it is a matter now in the statutes of British Columbia. It is also correct to say that this government led the way in Canada in terms of acquiring, for the people of British Columbia, a portion of that corporation capital tax. That was put in place some two to three years ago and has been followed by other provinces in the interval.
MR. STUPICH: Mr. Chairman, I tried to indicate to the minister, when I was talking about that second quarterly report being only seven days old when it was printed, that it wasn't the most recent second quarterly report. At the time, of course, it was a feat of magic to do it. It was associated with a political speech that the Premier was making and it was handy to have it ready then. At least this minister has never done that particular thing; it was done by a previous Minister of Finance.
I still have some concern, Mr. Chairman, and I'm going to go over it again. Were this the last minister to be dealt with then I could see why we should be dealing today with the estimates of the Finance minister, but there are some 14 ministers still to be dealt with. While the Minister of Finance took direction from the House Leader — which I would expect him to do — I wonder whether he suggested to the House Leader: "Might it not be more appropriate, in view of the particular nature of my work and my responsibility in the House, to delay my estimates just in case the third quarterly report for the year is ready in time for the discussion?" I wonder whether the minister had any thought of that at all; whether he considered it or whether he raised it with the House Leader.
To get back to the budget leak, I'm not sure I'm completely satisfied with the minister's answer. He described how he views a budget leak as being a want of confidence in the minister himself. I'm going to read a little more from the story: "The news that went out ahead of time included information to the effect that rent controls would be removed." It would seem to me that there could very well be people in the community who might stand to gain or to lose much with even a few hours' notice that rent controls were to be removed. It might well be that substantial deals were in the process of being made — substantial in that they might affect substantial rent properties. The knowledge of rent controls being leaked out — not publicly and not necessarily known to both parties in a discussion, but simply leaked out quietly and passed on by friends to friends — might very well have put a lot of money in the pockets of some people or, conversely, taken money out of the pockets of others.
I wonder whether the matter should have been treated quite as lightly as the minister treated it. I did ask him how far up in his ministry the matter went, and at what level within his ministry he felt that the buck stopped. He said he didn't believe he had any responsibility; if anyone gained or lost because of this advance knowledge, then it was not his neck that was on the chopping block. He didn't indicate whether or not anyone else's was. Perhaps the fact that some sizeable amounts of money may very well have been made or lost wasn't important. Perhaps no one was even chastised. Perhaps it was brought to no one's attention. We don't really know. He said that there was some investigation and it was simply considered not to be a matter important enough to cause the minister himself to resign. As I recall, that was his answer.
HON. MR. CURTIS: Mr. Chairman, in the event it had been indicated that there had been any gain as a result of special knowledge in matters associated with the budget, then the buck would clearly have stopped with me as the minister, and not with an official. But that was not the case. I do recall that it was raised immediately after the budget of July 7. I recall that some concern was expressed, and one columnist was referred to. But I think it falls more into the category of an indication of government policy, rather than a specific leak on a tax or a fiscal measure, which would directly impact upon the Ministry of Finance and would give benefits to individuals who had early or first knowledge prior to its being announced in this House.
MR. HOWARD: I listened earlier to the minister's comments about trade missions going to other countries, indicating to those other countries and to people in them that it's good business to do business with B.C. That's a laudable perspective. It's a concept we've advocated steadily and regularly for a long time: that one of the responsibilities of government is to be of assistance in that regard, to be a helpmate in that regard, and to do other things as well in terms of the economy.
But if we're going to have ministers go to other countries simply to assist in selling the products that we now produce, then we're likely to continue for too long a time in the cast or mould that we have been in, namely that of producing raw materials and of founding our economy on our extensive natural resources, with the least amount of processing of those resources — in other words, selling raw or near raw materials. If that is the purpose and intent of these trade missions, I would submit to you that it is rather short-sighted. I don't want to rehash any of the events that were discussed during April and May a year ago, but they were discussed, and some of us argued at that time the necessity of attempting to develop trade with China in forest products. We were castigated for making such a suggestion.
[4:15]
Interjection.
MR. HOWARD: I heard the words of castigation: "How ridiculous can you be? There is no market over there." Yet I was pleased to hear that shortly after the Legislature was laid off last October 21 the Minister of Forests (Hon. Mr. Waterland) headed for China to deal with trade matters. That's
[ Page 2957 ]
commendable and long overdue. But we still have to face the fundamental fact that there is a requirement and obligation to deal with our domestic economy as well and to make the same kind of effort on the home front as is being made on the export front. If it is the case that a certain international market may require — to mention lumber for the sake of the argument — dimensions that we do not normally produce for the North American market-standard 2-by-4, 2-by-6, 2-by-8 and so on — then I think we're obliged to work with industry to gear up for that particular market. That's the sort of thing that should be involved in trade missioning. It's the sort of thing that should be involved at home. I heard the Minister of Forests on CFTK in Terrace applaud the fact that a small lumber manufacturer in his own constituency — I believe it was in Merritt — had acquired a market for the sale of forest products in China.
I see the minister shaking his head. I don't know if he's shaking his head about having said that or not, but I understood that's what had occurred, that he thought that was okay. So did I. There should be a great deal more of it, because the difficulty we're in is that the lumber industry tends to gear itself up to the line of least resistance. This is what the trade missionaries or whatever they're going to be called should keep their eye on. For many years the line of least resistance has been the sale of dimension lumber for the housing market in the United States. We have virtually permitted all our eggs to be put in that one basket.
So I say yes, go on those trade missions and talk about selling the products that are here in B.C., but there is a companion obligation, I submit, to develop and have known to the general public an industrial strategy within the province that would be of help to industry in being able to gear up to serve those particular markets for products other than the ones which we produce right now. What is our economic activity in B.C.? It is based largely on the extraction and processing of the province's raw or natural resources. I mentioned that earlier. In the primary industries the raw resource production is about 8 percent of the gross domestic product. Manufacturing, exclusive of wood and paper products, is about 10 percent — not a very large segment of the total. The great bulk of our gross domestic product is taken up in the service sector — in other words, in the segments of our industrial or economic activity in the province that live off the primary resource industries and what limited manufacturing we have. Business, personal services, wholesale and retail trade, finance, insurance, real estate, transportation, communications and even the public service are all service industries living off the production of our primary and processing industries.
It looks, from a very quick examination of this, that about 18 to 25 percent of the gross domestic product is wealth-producing and the other 75 percent lives off that. We can't export the other 75 percent. We can't export the bureaucracies that exist in government. We can't export the transportation system, the communications and storage and finance and insurance. We can export some of the production that is associated with a service industry in the computer sense. High technology is a service industry that is connected with wealth production and we can export some of that. But by and large we cannot. We're not talking about exporting the service side of our activities; we are talking about exporting goods produced in either their raw or near-raw state or in their manufactured state.
I maintain that the trade missions that the minister is talking about appear to be simply for the purpose of selling and exporting the raw material, whether it be coal or the semi-finished product or whether it be pulp. But they're not really doing adequate service to this province and its future. We need to expand our activity at home in dealing with and assisting in developing value-added activity in this province. Value-added activity around a raw resource not only employs people in that added activity but it creates additional wealth and adds additional wealth to the regular or ordinary value of the raw material.
I'll give you an example in the copper industry. In B.C. we have at various times produced, when the copper markets are good, about 20 percent of the copper that is produced in Canada. We have more than sufficient copper-production capacity to support an additional smelter in this province. But by and large, with one exception, and that's the Afton Mines operation, we export and have exported for many, many years, our copper production in its next-to-near-raw state. The mining industry employs miners either to work underground or on open-pit operations to mine the ore. It employs people in the second phase, namely of running that ore through a concentrator, removing the impurities and the unwanted items from it and coming up with a thing they call copper concentrates. We then ship that out of the province, largely to Japan, and it is in Japan that the people are employed in the smelting, refining and the production process of producing copper wire, copper tubing and other copper products, and we buy them back again.
So while we may get one dollar for the copper concentrates that we sell, we fork out four or five dollars for the same product when it comes back again. The additional four or five dollars that we pay for that product that was mined here and is a natural resource in British Columbia goes to provide employment for people in other countries, provides access by government to taxation in other countries, provides wealth for service industries in other countries to live on that value-added wealth production taking place in those other countries. On that kind of gain we always come out on the short end. We are the losers. The nation is the loser on the balance-of-payments question. Depending on where the exchange rate is going — up or down — vis-à-vis the other country's currency, we may lose or we may gain a little bit on that side. But it is not sufficient to overcome the general deficit position that we are in by exporting raw materials and buying back the finished product.
I forget the author or I would certainly attribute it to that person, but I read about an economist who likened the economy to a sailing ship. He said that in our economic system it is capitalism which provides the wind and the gusto for the sailing ship. It is the capitalist system which is seeking the profit, seeking the return on investment — return, incidentally, as quickly as it can; that's the way it functions — but it is government that has to provide the rudder to keep the ship from running aground. It is government that has to provide the policy direction as to what serves the interests of the whole ship. The whole ship is British Columbia. If it is going to be a continuation of those policies that we have had in the past, which are simply, as I understand them, that government's only purpose is to create the climate within which "the capitalist system will feel comfortable and will be able to function," then we're headed for continuing disaster. Government, I maintain, cannot remain aloof from being the captain or the rudder or the director of that particular ship —
[ Page 2958 ]
as to where it is going, to keep it away from bad waters. That, I think, is probably more important in the long run than simply becoming a trade mission, a handmaiden to the producing capacity that we already have in the province.
Much was made a while ago of Toyota establishing a manufacturing plant in B.C. to process aluminum into wheels for its automobiles. It is located in the lower mainland somewhere — Richmond or Delta or one of those areas. As I understand it, Toyota will cast or make the wheels here, will put them on a ship and send them over to Japan, where the workers will put them on automobiles, and then they will ship the automobiles back again. That was the original context. I see the Premier shaking his head. I understand from that that he is negative about what I'm saying — not surprising. If that's not the case, it is neither here nor there, because it is not the major point that I want to get to.
The major point I want to get to is that there was government assistance to Toyota to establish the plant in this province. To what extent that assistance exists, as between the federal and the provincial government levels, I don't have the information readily available. But government stepped into the picture, or was asked to step into the picture, responded to something and said: "We'll help out. We'll provide some kind of assistance." That's okay. That's a fair enough concept to have. If it is necessary to use public funds.... The Minister of Industry and Small Business Development (Hon. Mr. Phillips) advocates this policy, incidentally: that, yes, it is necessary to use public funds to provide subventions or subsidies or handouts or helping money to industry. That's considered to be a matter of public policy. I submit that it should be expanded and that there should be some guidelines surrounding it. There should be some knowledge about how this system functions, instead of doing it on a kind of ad hoc basis.
[4:30]
There should be connected with it, in my view, the perception that if some industry wants to move in the direction of processing further the products that we have here, then there should be some kind of regional social responsibility involved. It should not just be a case of the particular company itself saying, "We want to locate here in location A," and government responding by saying: "Well, that's okay with us. Here's some taxpayers' money to help you out." That's exactly what happens now. There should be some conversation with groups like that to say: "What about location B? That's an area that is seriously disadvantaged. That's a area that has some positive aspects insofar as the particular product is concerned." As long as there's a failure to use that kind of activity.... We may have some economic activity as a result of the trade mission, and I'm sure that if we do, various ministers will be the first to tell us about it, including the Minister of Finance. I'm not decrying that. But that's where we'll hear it from first. He says "maybe." I say okay, that's fair game. We understand that type of activity. But it won't be good enough in the long range to serve the interests of the people of the province of British Columbia if it is simply a trade mission which is going abroad in order to sell the things we're producing now and nothing is happening domestically to see where we are going within this province.
I dislike the phrase "hewers of wood and drawers of water." It is a cliché that has been used so often that it's almost too commonplace to use, but it's an understandable phrase. It may be an exaggerated phrase in one sense or another when applied to particular industries and relationships. Nonetheless, it is one that has such common usage that if you don't use it people don't understand what you're talking about in hose terms. If we don't do that, that's what we will continue to be. We will continue to be responding or reacting to situations in other parts of the world — responding to, reacting to, demands of the corporate world about what the corporate world wants in order to serve its position and its balance sheet. There needs to be the social responsibility, the economic responsibility and the guidance and rudder provided by government for the benefit of all of the province, not just for the benefit of one particular economic part of it.
We can argue about trade commissions for a long time. We engaged in them ourselves, I understand, when we were government. That was a good thing to do. I think I'd like to leave that particular subject matter. I was interested, seriously, in what the minister had to say about that. I think the Minister of Industry and Small Business Development has made something like a dozen or 15 trips on trade missions to other countries over the time he has been the minister. Arising out of that we see one item called northeast coal, but he's continually on these. As I said, the Minister of Forests (Hon. Mr. Waterland) was in China, and what the result of that will be.... The Minister of Agriculture (Hon. Mr. Schroeder) was in different places in Europe dealing with agricultural products. All well and good. The basic thing is results and responses and some indication of what may flow from this, but if it's that operation in isolation from what's going on at home and what needs to go on at home, it's too short-range. It's not broad enough in its perspective of what we really need in this province.
MR. PASSARELL: I have four short questions for the minister. They're constituency problems basically. The first one is the sales tax for the community of Atlin. One of the problems, Mr. Minister, is that the three or four small businesses in the community of Atlin are being hurt because people are going 60 miles north up into the Yukon and buying the same products without having to pay the sales tax. The small businesses in the community of Atlin are finding it difficult to compete if people are going to come into the community, say, to the Atlin General Store and have to pay a sales tax on an item when they can drive 60 miles up into the Yukon Territory and buy the same product cheaper, without the sales tax. I know it's a difficult problem, because if you make an exception for the community of Atlin, then, particularly along the B.C.-Alberta border, people would be saying: "Well, if you did it for Atlin, why can't we have it here?" It's something I wish the minister could look at. It's an isolated problem. There are no other communities around where there is competition. People are going up into the Yukon. Something could be worked out there.
The second problem is the sales tax on building supplies. It's difficult in a restraint program, but if we could cut back the sales tax on it, by maybe 50 percent, it would encourage small business and individuals working on their homes and putting money through the system by going out and developing their homes.
The third issue is that many residents in the far north build log homes. Right now some jurisdictions in the United States, particularly Vermont, are taking away any kind of tax on log homes — property tax, sales tax. I read an article just last month about log-home building in the United States where there is no property tax; by building with logs you
[ Page 2959 ]
receive benefits. Forest industries in this province are a major business. It might be worthwhile to look into some kind of revenue-generating by encouraging people to build with logs and get a tax benefit.
Interjection.
MR. PASSARELL: Vermont, in particular.
The third issue compared with the log-home building is the property tax, which you are responsible for. I know it's a dilemma in which an individual improves his home, if he builds with logs, and finds his assessment going up. It might be beneficial for northern rural residents to put some kind of a limit — maybe a $5,000 limit — on which you could build on with logs and not have your property tax go up because of working with logs. It could work out to be very beneficial for the province, and in particular for our forest industry.
The last issue is another constituency issue, the northern tax benefit program, which the federal government has embarked upon to dismantle. In the last few years the minister and I have talked about this. This is basically a federal program in which northern residents receive tax-free benefits on tool allowances, bushing flights and so on. The federal government is dismantling this program, and I would like some input by the provincial minister into his federal counterpart to continue this program, which is very beneficial to northern residents and northern workers, who are going to be hit very hard once the federal government dismantles it.
Those are the four constituency problems which I raise to the minister, and I would appreciate his comments.
HON. MR. CURTIS: The sales tax question in Atlin was alluded to by the member. Similarity would be found in the northeast and southeast of the province. While he didn't say it, he would certainly admit that it is also to be found to the east in Alberta. I have had conversations with more than one minister responsible for taxation in Saskatchewan under the former and subsequent administrations, and the problem is, I suppose, to be found in Lloydminister, but not exclusively. I have gone to the northeastern section of the province and to the southeast — specifically to the northeast — to discuss this issue with people who have an easy hour's drive to communities such as Grande Prairie. I can't offer any assurance to the member with respect to Atlin into the Yukon, nor can I offer any assurance to a member — the Minister of Industry and Small Business Development (Hon. Mr. Phillips), as an example, representing South Peace — with respect to Dawson Creek into Alberta. We have discussed it. It's not a question of saying: "No, we don't want to examine it." One can have a corridor. One can draw another boundary, but where does that boundary lie? The member knows that I, along with a number of other ministers, have been in Atlin, and I will come up again to discuss it with some of the residents of that community, as indeed I must in Dawson Creek, Chetwynd, Cranbrook, Sparwood, Elkford and even Fernie.
Sales tax on building supplies. I would have difficulty commenting on whether that is such a good idea that I would like to act on it or that it is an idea that I am not prepared to act on — obviously one of these days we will move to a budget for the new fiscal year — except to say that others before him have indicated their wish that the sales tax be removed from a variety of building supplies. The member will know that there are a number of exemptions already in place, particularly with respect to heat loss, weatherproofing and so on. I would like the information from the state of Vermont on log homes. That frankly is the first time I have heard of this particular measure. If the member would send that along, I would be grateful for it. The associated comment, some allowance by the assessment agencies or assessment authority with respect to homes built from logs: I would think that we would have similar requests for homes built by other materials that are native to B.C. Still, I could discuss that with the member at any particular time and would happily receive what he might have in writing to offer on that.
With respect to the northern tax benefit program and its imminent dismantling, I shall, at his request and with anything that he wants to provide in an underlining way, take that to the Minister of Finance for Canada or, if more appropriate, ask my officials to take it to their counterparts.
MR. MITCHELL: I was kind of at a loss sitting here looking at all these Social Credit members sitting over there and not participating in what I consider is the most important debate that we have today, which is the Minister of Finance's estimates. Maybe they are at a loss for words and have no program that they wish to provide or any suggestions to make to the minister.
I was also very disappointed that the Minister of Finance in his opening remarks did not bring to this House a fair speech on where British Columbia is going to go. We had a budget last year — and I say it was last year, even though we are still in the same fiscal year — that laid out certain benefits that were going to take place within that budget. It was going to give some direction and improve the economics of British Columbia. Because we have gone to this late date, I was quite convinced, Mr. Chairman, that the minister was going to be able to show this House what that budget and what his ministry have given to British Columbia.
[4:45]
I also know from reading the papers that many of the various ministers have taken sojourns throughout the world. I felt that because the taxpayers have been paying for these trips, the Minister of Finance especially should have brought back to this House in his opening remarks a report on some of the businesses he has contacted and what type of potential new industry these trips have produced.
I think it's important, Mr. Chairman, that we MLAs in this House accept the responsibility that each one of us accepted upon our election, and that is to pave some path that will lead this province into a future of industrialization to produce secondary jobs for youth that are coming along and for those who have been, in one way or another, displaced from other occupations. We must give serious consideration to where this province is going to go and what new industry this province can support.
As one who grew up in this province, the same as did the minister, we have watched job after job leave the greater Victoria area, leave Vancouver Island — not only leave and be resettled in some other locality, but they have gone out of business. Now there is a change in technology that every one of us here accepts. Every one of us accepts that these changes will come, but we must be prepared to look at where British Columbia is going. We must look at utilizing the excess of power that this province is producing, and we must look seriously at using that power to produce aluminum or some other secondary industry. We cannot just sit back on a band-
[ Page 2960 ]
aid program of using that power and selling it to our neighbours to the south. I was really disappointed that the minister didn't bring to this House, to the members or to the citizens of British Columbia his government's ideas and his government's hopes. I say the most important thing that this province and each one of us as MLAs must look at is what jobs we are going to produce for our youth and what jobs we are going to produce for the people who want to make this province their home.
It bothers me that maybe the minister is not concerned about the future of B.C. Maybe he is not concerned about the types of jobs that are available and what jobs that we in the school boards and we as parents can direct our children and our grandchildren into. I say that because I thought the minister might also have brought some confirmation, one way or another, of this rumour that is running around the Legislature and government service that he will be leaving that particular position and will have another job with B.C. Hydro. I believe the Minister of Finance (Hon. Mr. Curtis), in all fairness to him, will fit right into B.C. Hydro if it means continuing to add more substantial debt to this province. During the four years that he has had the honour of holding that particular position, the debt of this province has skyrocketed like never before. If you read the financial statements that have come out of B.C. Hydro, the debt added by that particular organization as a millstone for the people of this province has been as horrendous as the other debts we have gone into.
I am not one, and I never have been one, who believes we should borrow our way to prosperity, because you do not. I know that you, Mr. Chairman, would never, in your own home, incur the debt for your children or grandchildren that this province has done without establishing a more secure job situation that the public can have some hope in. I feel the minister failed in his address to give us that direction, just as he failed to confirm or deny the rumour that he will be leaving that particular position and going to B.C. Hydro. Maybe he will be getting a promotion that pays a little more and that he can add his pension on to. I'm not sure how that goes. I think the minister should shed some light on these rumours, because I for one, and I know the rest of the members as well, would like to get some direction on where we are heading.
I would also like to bring up one constituency problem. I hope you will not rule me out of order, Mr. Chairman. When I tried to bring it up where I believe it should have been brought up — that is, in the discussion of Bill 22 — the Speaker ruled me out of order, and I received assurance from the minister that I could bring it up under his estimates. I am convinced in my own mind, from studying all the parliamentary guidelines, that I'll be out of order. I was ruled out of order by the Speaker, and I have to give some credit to him. It was at 8:30 in the morning after an all-night session, and I feel that my explanation did not get through to his wise and thoughtful beliefs. He thought I was out of order, and to get him off the hook I believe the minister said I could bring it up under his own estimates.
Interjection.
MR. MITCHELL: Are you going to make a point of order and bring in closure?
MR. CHAIRMAN: To the estimates, please.
MR. MITCHELL: Yes, Mr. Chairman, I will get right back to the estimates and carry on from where I left off early one morning after I'd had breakfast, although at that time the minister might not have had breakfast. I'm not sure; I'd been there all night.
I would like to discuss something under the assessment for rural lands, or property taxes. I would like to discuss it in the context of how in British Columbia we set a certain assessment based on recent sales. I feel that particular policy is wrong unless the recent sales did culminate in a viable change in that particular use of the area. I know, Mr. Chairman, you're not aware of the particular location, but I know the minister is; and if I talk through you to him he will understand the particular districts we're talking about.
I'm talking about the Langford area, Station Road. If I could give some background, that particular area had been residential for many, many years. One particular developer came into the district and started to attempt to accumulate lands in that area and to have the zoning changed. I believe, if I'm not mistaken, the zoning was going to be changed to either commercial high density or townhouse development, The majority of the properties in that area were originally subdivided following the Second World War. A lot of the properties were bought by servicemen, who were coming back and getting in under the federal grants where for two and a half acres you qualified for farm or rural grants.
This particular gentleman that I would like to bring to the attention of the minister was a veteran. In 1960 he purchased two and a half acres on which he built his home. This particular developer came to all the residents in that area and made offers: he offered options of $20,000 per lot to purchase the property. I believe the figure he was offering was around $300,000. A number of the residents did take the $20,000 option. My particular constituent did not want to move, because it was his home; his wife had become an invalid and he had put in ramps so that his wife could get around the house in a wheelchair. This is where he preferred to say. I'm not saying that he was right or wrong, but it was his preference to stay there. When the time came for the options, some people picked up their $20,000 options; one individual sold his property for in the neighbourhood of $300,000. Because of that sale in the area all the land and the homes were reassessed up. In some cases this may be viable, but in this particular case the individual who had paid the $300,000 and had given the $20,000 options went bankrupt because his particular proposal was not economically viable at that time. The whole development fell flat. At that point, when it was proven not to be viable and when bankruptcy came in, the development was not going to take place. But because of the one recent sale all the properties were assessed.
[5:00]
For the minister's benefit, I would like to go through.... I know he has received copies of this, but because of the legislation has not found a need to alter it. In 1981 the particular land was valued at $39,550, and the buildings, which was the residence, was $33,050. In 1982 — and this was not because of the recent sale, but because of the increased value of land in the greater Victoria and the Western Community areas — the land had gone up 31 percent. This was a normal reassessment because of sales in greater Victoria. The value of the land went from $39,000 to $56,600. The buildings had gone from $33,000 to $48,000. The actual value of all the property had gone up to $105,000. This was
[ Page 2961 ]
basically a 21 percent increase in the assessment. My particular constituent, Mr. Christopher Smythe from 741 Station Road, appealed that assessment.
In the appeal, the fact came out that a piece of property in that area had sold at the $300,000 mark, and they said he was underassessed, so they made up for it. Next year, in the 1983 assessment, the land went from $56,000 to $239,800. I guess for some unknown reason the residence that a year before was worth $48,000 was dropped that year to $1,000. What you are doing, Mr. Chairman, is putting an economic squeeze on veterans, on citizens who for some reason or other did not even take the $20,000 option and who didn't even get the benefit of the option. His taxes have gone, from 1981.... Now, under B.C. assessment, his total tax was $2,785.36.
I bring this to the attention of the minister, and I'd also like to bring to his attention comparable taxes in other provinces. I know the minister, who reads the Times-Colonist, is quite aware of a particular article that appeared....
I'm going to have to confess I haven't got the date, but it appeared last year. It was dealing with an old-timer who owned a home in Toronto, a gentleman by the name of Herb Murray, age 88. He has a piece of property right down in the centre of the city, for which he has been offered $1 million. The property all around it is obviously being used for highrises; the value of the surrounding land is comparable to the $1 million he was offered. The interesting part about that is that his taxes in Toronto for the same piece of property that he has been offered $1 million for are $1,842. When you compare that to the taxes on a piece of property valued at, we'll say, close to $300,000 in B.C., they pay $2,785. If the same regulations and assessment were in Toronto, that gentleman would be paying $11,140 for taxes.
I'd like to say that there is a different attitude to the preservation of the rights of people to own a home. I am convinced, as a Canadian and a fellow veteran of my constituent, Mr. Smythe, that when you have made your home in a particular area since 1960, you've raised your family and you have an invalid, there must be something in the heart of Minister of Finance to bring in some type of legislation that would not allow the government to squash the little homeowner out of his home.
There is legislation which was brought in by the previous Social Credit government in 1959 to cover the areas of West Vancouver and James Bay when the values of the property were skyrocketing because of the construction of highrises, and at that time the then Minister of Finance felt that if you had owned that property for five years, your assessment, if it continued to be residential, would remain the same. That was good legislation. I want to make a correction, Mr. Chairman. The particular piece of legislation came in in 1964.
It had a five-year back-dating to cover the skyrocketing prices that land was being sold for in that particular area. So anybody who owned the property before 1959 was exempt from having their property go up. I feel it was good legislation but it was not, for want of another word, indexed. I think a small amendment from when it was brought in, in '64 so that it has five-year back-date, would stop people from going around and buying property for holding purposes. If it was brought up to date, then if you owned it for five years and someone came in as a developer and skyrocketed the value of that land, you wouldn't be caught in that squeeze.
I feel the piece of legislation referred to in Bill 22 would cover people like Mr. Smythe, who lived in that home, as I say, since 1960. But because he hadn't lived in the house in 1959, he could not reap the benefits of the legislation. In all the times I've condemned this government, I really don't think they are so hard-hearted that they cannot see their way clear to bringing that legislation up to date. I do have it in my notes somewhere and I know the minister has it at his fingertips. To cover people who are caught in this bind, they could change the 1964 legislation in such a way that everyone who lived in a home for at least five years could maintain that home with the same residential assessment, instead of being caught, like Mr. Smythe, in a squeeze where, as an individual on a small pension, he cannot afford to pay the $2,700 taxes. Even with the $650 grant I believe he pays something like $2,100 a year in taxes. He does have other expenses and I feel he did not gain in it. The company that forced the price up did not gain; they went bankrupt. It was poor economic planning on their part. Maybe they happened to come in at the wrong time of the year. There might have been changes in the regional governments at that time and the particular zoning did not go through.
I would seriously ask the minister to make some kind of commitment or give some explanation to people who are caught in this particular bind.
HON. MR. CURTIS: Mr. Chairman, yes, I do recall the specific circumstance to which the member for Esquimalt–Port Renfrew has referred. In fact, it has been brought to the attention of the office and the Assessment Authority and I'll commit today to examine it — not just in isolation, but indeed similar instances throughout the province. I am not sure the solution is quite as easily achieved as the member has indicated. In 1983 the member did want to meet with me — he couldn't attend the meeting — and it might have been to discuss that. I would like to meet with him and go through that specific instance. We have representatives of the Assessment Authority nearby today; we also have, obviously, officials from the ministry, and I am now requesting them to review this type of circumstance and perhaps recommend ways in which it can be corrected.
I thank the member. He has pursued this one quite actively and over a good long time, and I think it merits some study. I don't want to indicate that there is no solution, but if that circumstance occurs on a number of properties in a relatively small community — let's not talk about Langford, but let's talk about a small municipality — then I think the member will acknowledge that it is going to impact quite significantly on all other taxpaying properties within that municipality. I offer that not as a negative but as a caution. Let's examine it in the course of the coming weeks. I think my file is pretty complete on it, but if the member and I can get together so he can expand on anything I'm missing, I would appreciate it.
MR. MITCHELL: Yes, I would appreciate the opportunity to meet with the minister. That wasn't a particular issue, because my constituent was chased out of your office when he was trying to pursue it himself, so that is how I came to it.
HON. MR. CURTIS: Oh, come on. Nobody's ever been chased out of my office, Frank. What are you talking about?
MR. MITCHELL: He was kind of advised that he had pursued it far enough. Anyway, I'm not going to go on about
[ Page 2962 ]
that, and I know that the minister would not do that, because the particular constituent of mine has friends in Saanich.
I would like the minister to review the reasoning for the legislation that came in 1964, under the previous Social Credit government. From the information that I have received from people in your ministry, it was brought in to cover areas in West Van and in James Bay — the two particular areas where there was a sudden change in the value of land for new development. In the wisdom of the Minister of Finance at that time, he thought that a five-year date would be acceptable. You've lived in a home, and you shouldn't be squeezed out of it because someone else wants it. I think if we could explore that and check that out, I would appreciate it, and I appreciate the offer to meet with him.
[5:15]
MR. LOCKSTEAD: Mr. Chairman, the minister has to leave the chamber for a few minutes, and I understand that. I want to talk about a particular matter with the minister, but before I do that, and while the minister is absent, I just want to point out that here we are, in January — the end of January 1984 — discussing last year's estimates. This is the most ludicrous situation that we've seen in this House, certainly in my 12 years in this building. Here we are, discussing last year's estimates, about 92 percent of which have been spent, and expected to intelligently debate the spending estimates of the various ministries in this House. It really doesn't make much sense. It indicates to me that the government is disorganized and really can't manage its affairs very well. Last summer we sat some four and a half months and the government, instead of calling debate on the spending estimates of the various ministries, spent their time sitting around the clock, during some of those periods of time, debating very contentious bills, and finally ramming them through by closure on at least 20 occasions.
That's not what I'm up here to talk about. I have a very short question for the minister, and I'm going to wait for the minister. While I'm waiting I do have a question that the deputy perhaps can make a note of for the minister. That is about the closing of assessment offices throughout the province. There is an assessment office in Sechelt that looks after the largest part of my particular riding, and I understand that the office will be closing, with the loss of a number of jobs in that area. So I wonder if the minister could briefly tell us how many offices and what offices will be closing, in what areas, and how many jobs will be lost. I'm aware of the situation in my own riding, of course, but I don't know: is it several hundred jobs? And why? Why are they closing these offices? It's going to make it very inconvenient for my constituents to receive information on their assessments and on the rolls. So perhaps the minister could just enlighten us briefly on that when he returns.
Mr. Chairman, the topic I got to my feet to discuss very basically with the Minister of Finance.... Ordinarily the matter I'm going to be raising would not come under the purview of the Minister of Finance, but in this case, and if you'll bear with me.... I wish the minister was here. He shouldn't be much longer. This is a topic that I do require a direct answer on from the minister, in this particular example. Here he is. Good.
Mr. Chairman, the topic I rose very briefly to discuss with the minister is the increased ferry fares to the people living on the coast of British Columbia. As I started to say, this would normally come within the purview and jurisdiction of the Minister of Transportation (Hon. A. Fraser). I expect to be going into a great deal of detail on this issue when that minister's estimates come before the House. However, to give the Minister of Finance a bit of background on how we tie the Minister of Finance into this whole matter, let me say that the Minister of Finance is, of course, the Minister of Finance and chairman of Treasury Board of this province. Early in January a number of us had several meetings with the chairman of the board of directors and the general manager of the B.C. Ferry Corporation. When the matter of the proposed fare increases came up at that particular meeting, the chairman of the board told all present — and I believe he said it on television — that there are a number of decisions the board of directors can make, but fare increases are completely out of their jurisdiction. The order came directly from Treasury Board, cabinet and the Minister of Finance. That's on record. Now we have the opportunity to talk to the Minister of Finance and chairman of Treasury Board about these increased ferry fares.
Interjection.
MR. LOCKSTEAD: I know all that stuff, Mr. Attorney-General (Hon. Mr. Smith). Yes, Powell River and the Sunshine Coast, the Gulf Islands, Bowen Island.
I'm trying to explain to you, Mr. Chairman, how we tie in Treasury Board, the Minister of Finance and cabinet to this particular situation. You may be aware that the fare increases to Vancouver Island went up approximately 6 percent. People will accept that. But to some areas of the coast of British Columbia those fares went up a great deal more. Residents of theSun shine Coast, for example, will pay an increase of between 24 and 26 percent. Residents of Bowen Island will pay somewhat more: I think that in some cases a case could be made for about a 50 percent increase. Areas of the Gulf Islands and the northern coast will see similar increases — 36 percent, depending on how you compute the figures.
That is not the point I'm making here this afternoon, even though the percentages are far in excess of the government's announced guidelines, far in excess of what union contracts are being signed for and agreed to nowadays in this province. What the cabinet and Treasury Board has done — and the Minister of Finance.... The chairman of the board of the B.C. Ferry Corporation tells us, and has said so publicly, that they have no jurisdiction to reduce or reconsider their fare structures. There have been some modifications. Bowen Island, for example — and the member representing Bowen Island is here — has seen some slight downward readjustment. However, the point I am making here to the Minister of Finance.... I'm in fact charging the Treasury Board and cabinet with directly interfering with the duties and responsibilities of the board of directors of the B.C. Ferry Corporation in terms of fare structures. People in my riding, on Bowen Island, theSun shine Coast and the Gulf Islands, are being unduly penalized by this government and this cabinet because they happen to live in these areas. The board of directors of the B.C. Ferry Corporation are powerless to do anything about it because they were forced to take their orders from cabinet, according to the chairman of that corporation. That is less than one month ago.
I would like the minister to let us know at this time how he can possibly justify these horrendous fare increases, which are counterproductive. That is a discussion I will get into with the Minister of Transportation at the appropriate time.
[ Page 2963 ]
But I would like to know why cabinet and Treasury Board are interfering directly in the internal management operations of the B.C. Ferry Corporation, and why these fare increases are well in excess of the government's own announced guidelines, and why the board of directors have been forced into a position of increasing these fares in certain areas of British Columbia against the wishes of the public, which will certainly do a great deal of destruction to the economies of theSun shine Coast and Powell River, and, I presume, the Gulf Islands and possibly Bowen Island. I'll tell you, these ferries are our highways. We don't have tolls on the highways leading up to Prince George or Kamloops.
Interjection.
MR. LOCKSTEAD: We don't even have tolls on the ferries in your riding, Mr. Minister of Forests (Hon. Mr. Waterland).
So people on the coast are being penalized once again by cabinet and Treasury Board. That's the only reason I raise the matter at this time. Perhaps the Minister of Finance would care to remark on this matter.
HON. MR. CURTIS: Mr. Chairman, the member for Mackenzie (Mr. Lockstead) spoke about the closing of assessment offices by the Assessment Authority. The Assessment Authority has, I think, managed very well indeed in exercising restraint. In fact it was perhaps one of the first agencies of government, if I can use the term in that sense, to recognize that there were limitations as to the amount of money which could be made available for the operation of the Assessment Authority. I believe that the member spoke specifically with regard to the difficulty some of his constituents are having in receiving information. The Assessment Authority has made arrangements to use municipal offices in certain areas where Assessment Authority offices are closing. That, I think, will work, in the context of the member's concern. I would point out that the closure of those offices has not been limited to the constituency of Mackenzie. It has been happening in a number of parts of the province, including....
MS. BROWN: He said that.
HON. MR. CURTIS: If he observed that, fine. I didn't hear all the detail of his comment but rather the subject which was concerning him. I could point out that one office which has been affected by closure is in the constituency of Saanich and the Islands. But where possible we are going to use other offices, and in the case of a municipality, regional district or whatever it will be very easy to ensure that that information is available in a timely fashion, for those concerned property owners who are involved in the assessment process.
There has been, and continues to be, pressure on the Assessment Authority from my office, as minister responsible, to achieve a significant reduction in staff. That is one of the reasons that there is legislation before us with respect to moving to an assessment roll every second year, because it is not good enough to ask that precisely the same service and a reduction in staff be undertaken by an agency.
The member is obviously concerned with respect to fares charged by the British Columbia Ferry Corporation. I do not intend to intrude into that area of responsibility. I'm sure that what Mr. Hodgson would have alluded to is the fact that a subsidy level is set by government; that is, the amount of money which is transferred en bloc in the form of a subsidy to the British Columbia Ferry Corporation. That is not just a Treasury Board decision but rather more likely a Treasury Board recommendation to the government and then transmitted to the government. I can assure the member that neither the Treasury Board itself nor the chairman of Treasury Board involves itself or himself in the level of service to be undertaken by the Ferry Corporation, in the price that is to be charged for food served by the Ferry Corporation, as well as the scheduling, the routing, the types of vessels to be used. For the member for Mackenzie (Mr. Lockstead) to leave the impression with the committee — inadvertently, I'm sure — that Treasury Board is setting the rates charged by the Ferry Corporation is just not correct, and I'm sure he didn't mean to do that. Again, it is a fact that the size of subsidy for the Ferry Corporation is determined by the cabinet on the recommendation of Treasury Board. What happens after that is a decision for the Ferry Corporation and its board of directors.
[5:30]
MR. CHAIRMAN: The member for Mackenzie and the Chair might note that in terms of legislative responsibility the Minister of Transportation and Highways (Hon. A. Fraser) is responsible to the assembly and to the committee for operations of the B.C. Ferry Corporation. Some latitude has been allowed to the minister and to the member. I'm sure we can get back to the administrative actions of the Minister of Finance.
MR. LOCKSTEAD: I'm very much aware of that. I'm not making the argument. If I did go into that type of argument inadvertently, I apologize. It was not my intention at all to raise the issue under the spending estimates of the Minister of Finance. We'll get into that discussion at the appropriate time. I understand very well how the subsidies for the corporation, or lack thereof, are arrived at, and all those things. I deal with it practically every day of my life.
That is not why I rose under this particular minister's estimates. I rose under these estimates because we were told directly — and I do believe that this appeared on television, although I didn't see it.... The chairman of the board of the B.C. Ferry Corporation told not only me but a lot of people gathered at separate meetings that I attended over the fare structures where ferry fares were increased far above those than in other areas, and far above the government's own announced so-called inflationary guidelines — guidelines which government ministers don't keep themselves....
The charge I'm making is simply this: when we as a group — municipal and regional board officials, chamber of commerce people and anybody else that you can think of — asked that our resident commuter cards not be taken from us on theSun shine Coast or Bowen Island and other areas I've previously mentioned, the chairman of the board of the B.C. Ferry Corporation stated very plainly that the matter was totally out of his hands, and that it was a matter that the board of directors had no jurisdiction over at that particular time, and the decision in order to have those kinds of things which a previous Social Credit government had granted to people in my riding, for example.... The chairman of the board said: "We as a board of directors can take no action without the direct okay from Treasury Board and cabinet." The Minister of Finance, as far as I'm aware, is the chairman of Treasury Board. What I'm suggesting to you is that there was
[ Page 2964 ]
direct cabinet interference, and if this is not so then tell me so, and I would have no hesitation in once again going back to the board of directors of the B.C. Ferry Corporation and saying that we were told this on December 9 in Powell River and on theSun shine Coast or Texada Island or wherever by your board members, the general manager and yourself. Now, who is not telling the truth? "Evading the responsibility" would, I think, be a better term.
HON. MR. CURTIS: Mr. Chairman, recalling your earlier caution, I am not the minister responsible for the Ferry Corporation. I made the point earlier, and I stand by it, that the involvement of the Treasury Board and the Minister of Finance would be with respect to the size of the subsidy. That is, I suppose, for purposes of debate, within the responsibilities of whomever happens to be the Minister of Finance at the time, but I think there are other members who have arranged their meetings with the chairman of the Ferry Corporation board.
The second point is that — unless I am mistaken, and I don't believe I am — the estimates for 1983-84 for the Minister of Transportation and Highways (Hon. A. Fraser) have not yet been presented to this committee. The member can explore it at that time, and also in the interval the chairman of the board himself may have some comment to make directly or indirectly to the member for Mackenzie.
MR. LOCKSTEAD: I have no further comment. Obviously the minister is not going to answer, and we're not going to get to the bottom of the matter here. I can guarantee you, Mr. Chairman, that when the estimates of the Minister of Transportation and Highways come before this House the answer from that Minister of Transportation and Highways will be: "I do not sit on Treasury Board, so it's not my responsibility. Talk to the Minister of Finance." I can guarantee you that.
MR. LEA: I'd like to ask the minister about a responsibility that he does have jurisdiction over, and that's the B.C. Systems Corporation. The committee will recall that Beautiful British Columbia magazine was sold to a firm — I'm not sure of the name of it; it's one that's under the jurisdiction of Jim Pattison in Vancouver — and it came to light after that sale that B.C. Hydro would be providing a service to the Pattison group of supplying mailing for Beautiful British Columbia magazine. But that's already out there; my question is another one. It has come to my attention that the B.C. Systems Corporation is still supplying services to Beautiful British Columbia magazine — even though it's privately owned — for absolutely nothing again. I'd like to ask the minister if he could tell me what the worth of that service is to Beautiful British Columbia magazine that is being supplied by the taxpayers of this province through the B.C. Systems Corporation in what was supposedly to be a privatized arrangement for that magazine.
HON. MR. CURTIS: Mr. Chairman, to the member for Prince Rupert, either Beautiful British Columbia magazine would be paying for it, or the arrangement was part of the consideration at the time of the sale. I don't have the details for the member. I undertake for the committee, however, to provide that information to him at the earliest possible time, which would be, if not tomorrow, the following day. I will give him full information on that.
MR. LEA: I would like to thank the minister for endeavouring to get that information. It's my understanding — this is to help the minister — that it was part of the agreement for sale that the B.C. Systems Corporation would continue to supply their services to Beautiful British Columbia magazine even though it had been so-called privatized. As far as I'm concerned, that is a direct subsidy to a private company and makes it even more suspect. I think what should happen so this can be cleared up.... I don't know how many other hidden deals there are between the government and the company that now owns Beautiful British Columbia magazine, but I think it would clear it all up if the whole agreement was tabled in the House. I would like to ask the minister if he would be prepared to table in the Legislature, or with this committee, the agreement between the government and the company that now owns Beautiful British Columbia magazine so that we can take a look at it as taxpayers and find out whether it's a good or bad deal. Would the minister undertake to table that agreement in the House?
HON. MR. CURTIS: Mr. Chairman, I think that the question would be more appropriately directed to the Minister of Tourism, whose estimates have not yet been dealt with by this committee for 1983-84.
MR. CHAIRMAN: The point of order is well taken.
MR. LEA: This agreement pertains to the jurisdiction under this minister in part, which is the B.C. Systems Corporation, and I believe this minister is also connected with B.C. Hydro. So two parts of the agreement are within this minister's jurisdiction, and he could still table the agreement and be within his jurisdiction. It would only be a stalling move to put it off until the Minister of Tourism is up in his estimates so they can figure out what their tactics are going to be. That's obvious.
Mr. Chairman, if they wanted to be forthright with the people of this province, they would have made the agreement available in the first place. That's what would have happened. Now we're finding all these hidden clauses that are in the agreement that are going to keep supplying this privatized magazine with services supplied by the taxpayers of the province. I suppose what will happen is that then it will end up with them saying, "Look at this. Beautiful British Columbia magazine is now making even more money than it did when it was in government because it's being done by the private sector." Is that what this minister considers free enterprise? That the taxpayers are going to subsidize this magazine? I think it is just putting off and begging the question to say that the Minister of Tourism down the line is going to do it. I'd like to have an agreement from this minister that he will table one.
HON. MR. CURTIS: Mr. Chairman, with respect to the British Columbia Systems Corporation, clearly I have direct responsibility and accountability to this committee and to this House for that corporation. I do not have direct accountability or responsibility to this committee or this House for Beautiful British Columbia magazine or for the Ministry of Tourism. I undertook to provide to the member for Prince Rupert the information he raised with respect to the B.C. Systems Corporation as it affects the Beautiful British Columbia magazine from Systems Corporation, and I shall do that. I'll do that at the earliest opportunity.
[ Page 2965 ]
MR. HOWARD: Mr. Chairman, I want to discuss with the committee and the minister a rather, I think, serious matter involving the relationship of the government and this Legislature with the citizens of the province. On the one hand, as part of the authority of government we have the right of taxation. Government doesn't hesitate in that regard, and hasn't hesitated in each of the fiscal years, to bring the requisite taxation legislation forward as quickly as possible after the budget, and try to get it through and everything tidied up insofar as collecting the taxes is concerned. The companion to that is accountability: to tell the people of British Columbia how the money raised by taxation is spent. In other words, what did government do with the money that it reached in and took from people by way of taxes? It's a fundamental part of government's responsibility. One can't operate, and should not operate, without the other.
One of the mechanisms that we have for that accountability is the Public Accounts Committee of the House. The Ministry of Finance is the custodian of all of the bills, receipts, vouchers and accounts insofar as money spent is concerned, and in theory, at least, it makes those accounts, bills and invoices available to thePublic Accounts Committee. That's the aspect of accountability. The other aspect of it is in this chamber, or in committee.
But we have had a situation in the past few years where subversion has taken place with respect to the functioning of, and the opportunity for, thePublic Accounts Committee to get at the truth of matters insofar as government spending the public's money is concerned.
[5:45]
Not too long ago the standard practice — a practice which I understand, and have been told, has been in existence for a long period of time — was for members of the House, through thePublic Accounts Committee and through members on the Public Accounts Committ ee, to ask for and receive photostatic copies of documents in the possession of the Ministry of Finance which relate to the fiscal year then under examination by thePublic Accounts Committee. It was fairly open, fairly free, fairly easy. If a member was interested and wanted information about any subject matter insofar as past expenditures were concerned, he could simply say: "Could I have a look at or receive copies of the vouchers attendant along with a certain expenditure?" and he got them.
The Public Accounts Committee and the Ministry of Finance intruded into that practice a couple of years ago first by making the decision that no longer would photocopies be available of the invoices or vouchers covering the expenditures — the cancelled cheques or whatever other documentation went along with or related to a particular expenditure of public funds. No more photocopies. They said: "From now on you can look at them" — which I thought was generosity in the extreme — "and you can make notes on a piece of paper about what's contained in those vouchers and those documents."
So research staff members — I don't know about research staff members of the Social Credit caucus, but I know about those attached to the NDP caucus — would go and look at the identified vouchers and documentation and make notes on pieces of paper as to what was contained in them or dictate into a tape recorder the relevant information, giving voucher numbers, cheque numbers, dates and the like, and then transcribe that later on so it could be examined by members of the committee.
The next move on the part of the Ministry of Finance was to deny those researchers access to those document, and confine that availability. Then the Ministry of Finance said that the only people who can examine those documents are members of the House. That was another restriction, another curtailment of freedom of access to government documents relating to the expenditure of public funds, another attempt to cover up something or — to be more generous in my phraseology — to make it more difficult to get access to that particular information. Then the next move on the part of the Ministry of Finance was to say: "No, not any member of the House can go and look at those documents; only members of thePublic Accounts Committee."
So in a short period of time a couple of years ago, the Ministry of Finance so confined and restricted access to public documents about public money — tax money being spent by this government — that it made it virtually impossible to do a thorough job of examining them and ferreting out what one could ferret out about public expenditures. In other words, secrecy was the order of the day, and every attempt was made by this government, this Ministry of Finance and that Minister of Finance particularly, because he was the minister at the time, to restrict access to public documents relating to the manner in which taxpayers' money was being spent.
During this session that commenced last June — and my colleagues on this side of the House who are members of the Public Accounts Committee during this session will be able to particularize this in more detail if they so desire — there has been the absolute impossibility of being able to find out any information whatever about the squandering of taxpayers' money during the fiscal year under review by thePublic Accounts Committee.
There is an absolute blockade against access to information. While the government adores the idea of legislating as quickly as possible to impose the taxes, it runs the other way when the question of accountability comes into force. For two years in a row the Ministry of Finance has been engaged in a program of denying the general public's full, rightful, proper access to the manner in which government has spent taxpayers' money, involving something probably in the neighbourhood of $14 billion or $15 billion — an amount of money that I can't grasp the significance of. There have been at least two years of taxation, at least two years of imposition, and two years of secrecy and moves to deny access to public documents.
Perhaps I'll ask the question and look to tomorrow to receive an answer to it. One is entitled to ask in all seriousness: what are you trying to hide? What are you trying to cover up? What kind of skulduggery has been going on for two years in a row that the Ministry of Finance would take that kind of action?
MR. CHAIRMAN: Order, please. I'll ask all hon. members to avoid any imputation of dishonourable motives to other members. Words such as "skulduggery" and "cover up" are most unparliamentary. Perhaps the member can continue in a more parliamentary fashion.
MR. HOWARD: I was not imputing any motives. I was asking a very serious question.
Interjections.
[ Page 2966 ]
MR. CHAIRMAN: Would all hon. members please come to order.
MR. HOWARD: The Provincial Secretary (Hon. Mr. Chabot) may not care what happens to public funds — tax money — but we do. I'm asking a very serious question about two fiscal years in a row, during which the general public, by actions of this ministry and this government, have effectively been denied rightful, proper, full access to what has been happening. I wonder if, at the suggestion of the government House Leader, and with his endorsement and his seconding of the motion, I could move that the committee rise, report progress and ask leave to sit again.
The House resumed; Mr. Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
MR. SPEAKER: Hon. members, at the opening of today's sitting, the hon. member for Nelson-Creston (Mr. Nicolson) sought to move adjournment of the House pursuant to standing order 35 to discuss a definite matter of urgent public importance, namely the government's announced intention to close the David Thompson University Centre. As all hon. members are aware, the restrictions relating to a motion under standing order 35 are numerous, and in this regard I refer the members to May's sixteenth edition, pages 368 to 374. On page 371 it is noted that a motion under this standing order will fail when an ordinary parliamentary opportunity will occur shortly or in time, and in particular when the matter involved could be raised on estimates. It would seem to the Chair that the matter complained of could be raised during the estimates of the Minister of Education, and while the matter is of some concern, it does not qualify under the stringent rules applicable to the motion under standing order 35.
I have also examined an application by the hon. member for Alberni (Mr. Skelly) pursuant to standing order 35 relating to the rolling over of forest licences into tree-farm licences, with an alleged loss of jobs in both the government and private sectors. The member further states that the transfers complained of are taking place without sufficient public analysis as to costs and benefits, and at the conclusion of his statement he refers to "deficiencies in information and in the public involvement process."
I refer hon. members to the sixteenth edition of May, page 370, which states the many restrictions attached to such a motion, in particular that the matter, in order to qualify, must fit into the following criteria: (a) it must deal with a specific single matter; (b) it must not be couched in general terms or cover a great number of cases; and (c) it must not be offered when facts are in dispute or before they are available."
With great respect, it seems to the Chair that the matter stated involves several assumptions which would make it difficult, if not impossible, for the Chair to identify the requisite certainty of the matter sought to be raised. If the member will examine the authorities quoted, I'm sure he will agree that the conditions have not been met.
Hon. Mr. Gardom moved adjournment of the House.
Motion approved.
The House adjourned at 5:56 p.m.
Appendix
WRITTEN ANSWERS TO QUESTIONS
90 Mr. Lockstead asked the Hon. the Minister of Energy, Mines and Petroleum Resources the following questions:
1. What is the total cost of the Cheekye-Dunsmuir transmission line to Vancouver Island to date, including planning costs, interest during construction, wages, materials, etc.?
2. What is the anticipated total cost of the line on completion?
3. When will transmission of power to Vancouver Island on the Cheekye-Dunsmuir line commence?
The Hon. C. S. Rogers replied as follows:
"1. The total cost of the Cheekye-Dunsmuir transmission line to Vancouver Island up to July 31, 1983, including direct costs, overhead and interest during construction is $480.1 million.
"2. The anticipated total cost, including direct costs, overhead and interest during construction is $835.4 million.
"3. The transmission of power to Vancouver Island on the Cheekye-Dunsmuir line will commnece in October 1983."
[ Page 2967 ]
91 Mr. Lauk asked the Hon. the Minister of Energy, Mines and Petroleum Resources the following questions:
1. Which government officials requested use of the V.I.P. lounge and box seating area at B.C. Place Stadium for the Edmonton-B.C. football game on Sunday, September 25, 1983?
2. Which requests referred to in reply to No. 1 were accepted?
3. Which government officials attended at the V.I.P. lounge and box seating area for the Edmonton-B.C. football game on Sunday, September 25, 1983?
4. Did any of the officials named in reply to No. 3 bring guests?
5. If the answer to No. 4 is "yes", who were the guests and which government official extended the invitation?
6. For each guest referred to in reply to No. 5, what organization did he or she represent on this occasion?
7. What were the charges incurred for food at this event and to whom were these charges billed?
8. What were the charges incurred for beverages and to whom were these charges billed?
9. What amounts were incurred for admission, staff and other services and to whom were they charged?
The Hon. C. S. Rogers replied as follows:
"On September 25, 1983, the B.C. Place Suite was used by the Cabinet
Committee on Economic Development to host some 24 members of the
executive of The Canadian Manufacturers Association. Food and beverage
charges were borne by the Government."